Issued March 21, 2008.
ACTION:
Final rule.
SUMMARY:
In this Final Rule, the Federal Energy Regulatory Commission (Commission) is revising its financial forms, statements, and reports for natural gas companies, contained in FERC Form Nos. 2, 2-A and 3-Q. The revisions are designed to enhance the forms' usefulness by updating them to reflect current market and cost information relevant to interstate natural gas pipelines and their customers. The changes will provide additional information that the Commission needs to carry out its responsibilities under the Natural Gas Act (NGA).
DATES:
This Final Rule is effective April 10, 2008. The revisions to FERC Form Nos. 2, 2-A, and 3-Q are applicable on January 1, 2008, and the termination of FERC Form No. 11 is applicable on February 28, 2009.
FOR FURTHER INFORMATION CONTACT:
Michelle Veloso (Technical Information),Division of Financial Regulation, Office of Enforcement, Federal Energy Regulatory Commission,888 First Street, NE., Washington, DC 20426,Telephone: (202) 502-8363, E-mail: michelle.veloso@ferc.gov .
Scott Molony (Technical Information), Chief Accountant, Division of Financial Regulation,Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, Telephone: (202) 502-8919, E-mail: scott.molony@ferc.gov .
Jane E. Stelck (Legal Information), Office of Enforcement, Federal Energy Regulatory Commission,888 First Street, NE., Washington, DC 20426,Telephone: (202) 502-6648, E-mail: jane.stelck@ferc.gov .
SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.
I. Introduction
1. The Federal Energy Regulatory Commission (Commission) is revising Parts 158 and 260 of its regulations to effect changes to its FERC Form No. 2 (Form 2), Annual report for major natural gas companies, FERC Form No. 2-A (Form 2-A), Annual report for nonmajor natural gas companies, and FERC Form No. 3-Q (Form 3-Q), Quarterly financial report of electric utilities, licensees and natural gas companies to expand and update the forms to reflect current market and cost information relevant to interstate natural gas pipelines and their customers. 1
The Commission is revising these financial forms to provide, in greater detail, the information the Commission needs to carry out its responsibilities under the NGA to ensure that rates are just and reasonable, and to provide pipeline customers and the public the information they need to assess the justness and reasonableness of pipeline rates.
II. Background
2. Before the restructuring of pipeline services promulgated by the Commission's Order No. 636, interstate natural gas pipelines offered both sales and transportation services. 2
Gas costs were charged to a purchased gas adjustment (PGA) account and were periodically adjusted and passed through to customers. The quid pro quo for the ability to recover the gas costs through a PGA tracker was the requirement that the pipelines file to restate their rates every three years. Order No. 636 eliminated the PGA regulations and the triennial filing requirement. Subsequently, the Commission issued a final rule that changed pipeline filing and reporting requirements in the post-Order No. 636 unbundled environment. 3
3. The financial reporting forms for natural gas companies were again revised in 1995, in Order No. 581, to reflect the changed regulatory environment of unbundled pipeline sales for resale at market-based prices and open-access transportation of natural gas. 4
Order No. 637, issued in 2000, among other things, revised the Commission's regulatory approach to pipeline pricing by permitting pipelines to propose peak/off peak and term differentiated rate structures. 5
4. Since the Commission eliminated the triennial restatement of rates filing requirement in Order No. 636, there has been a decline in filings under NGA section 4. 6
As stated in the NOPR, the records indicate that as many as 15 major and 20 nonmajor gas pipelines have not filed a section 4 rate case in more than a decade. 7
While the Commission may, on its motion, institute a section 5 investigation, it relies also on section 5 complaints filed by pipeline customers or state public utility commissions, to review a pipeline company's rates outside of a section 4 proceeding. 8
A section 5 complaint may rely on Forms 2, 2-A, and 3-Q financial data to support a complaint.
5. In 2006, two section 5 complaints were filed with the Commission, both relying on data provided in Forms 2 and 2-A to support allegations that the pipeline's rates were unjust and unreasonable. 9
In National Fuel , the pipeline responded that the Form 2 data relied upon by the complainants was not sufficient to support a complaint and that only a detailed cost and revenue study could provide the necessary justification for a section 5 investigation. In setting the complaint for hearing, the Commission rejected National Fuel's contention, noting that the Form 2 data relied upon by complainants was sufficient to raise serious questions about the pipeline's rates. 10
The National Fuel complaint was followed by a section 5 action filed by a group of Southwest Gas customers alleging unjust and unreasonable rates and relying, in that instance, on Form 2-A data. 11
6. The question of whether the Commission's financial forms provide data sufficient to support a complaint resulted in a review of Forms 1, 1-F, 2, 2-A, and 3-Q data in the fall of 2006. Staff met with both form filers and users to discuss the need for additional information or other clarifications. Thereafter, on February 15, 2007, the Commission issued a Notice of Inquiry (NOI). 12
7. The NOI sought comments on the need for changes to the financial forms. The Commission received 35 comments and 15 reply comments in response to the NOI. Eleven initial comments and two reply comments specifically addressed Forms 2, 2-A, and 3-Q data, with most pipeline customers seeking expanded information and pipelines opposing additional filing requirements.
8. Following a careful review of the comments and reply comments, the Commission issued a Notice of Proposed Rulemaking (NOPR) on September 20, 2007, proposing revisions to Forms 2, 2-A, and 3-Q, and the elimination of Form 11. 13
The NOPR proposed to add several new schedules, requiring pipelines to report: (1) The disposition of shipper-supplied gas; (2) transactions between the pipeline and its affiliates; (3) revenues and volumes applicable to discount and negotiated rate services; and (4) identification of rate treatment afforded new pipeline projects. In addition, the NOPR proposed modifications to existing schedules to require more detail regarding: (1) Sales data; (2) deferred income taxes; (3) state income tax expense; (4) regulatory assets and liabilities; (5) distribution of salaries and wages; and (6) employee pensions and benefits.
9. The Commission received 17 comments in response to the proposed reporting requirements which ranged from favorable to those seeking yet more detailed information, and a few who argued that the proposed modifications were unnecessary or burdensome. 14
In general, most commenters applauded the Commission's efforts to improve the quality of the financial forms. After careful consideration of the comments received, the Commission is adopting the changes and revisions as proposed in the NOPR with certain modifications and clarifications as discussed below. If no comments were received on a particular issue and it is not discussed below, the proposal is adopted as set forth in the NOPR.
III. Discussion
A. General
10. The NOPR discussed a concern raised by the Interstate Natural Gas Association of America (INGAA) that the proposed changes to reporting requirements could blur the distinction between sections 4 and 5 of the NGA, and invited comments on this issue. 15
A few commenters addressed this issue. Dominion Resources, Inc. (Dominion) commends the Commission for recognizing this concern and requests that the Commission keep the concern in mind when finalizing the rule. 16
The Michigan Public Service Commission (MPSC) urges the Commission to reject any argument that the reporting requirements proposed in the NOPR would improperly shift the burden of proof under section 5 of the NGA by requiring pipelines to justify their existing rates outside the context of a section 4 rate case. 17
The MPSC states that the NGA explicitly gives the Commission the authority to require periodic reporting as necessary for purposes of administering the NGA. 18
The Process Gas Consumers Group (PGC) states that the NOPR is proposing greater transparency and accuracy, which are essential to the Commission's oversight obligations and neither of which could reasonably impact the burden of proof in section 5 proceedings. 19
11. The Kansas Corporation Commission (KCC) and Apache Corporation (Apache) express concern that the ability of a pipeline to file a section 4 rate case even after parties have filed a section 5 complaint, as transpired in the recent Southwest Gas proceeding, may serve as a disincentive for some parties to file section 5 complaints. 20
Apache recommends that the Commission add to the Form 2 and 2-A a cost and revenue summary page that would provide the Commission and interested parties a clear view of whether a pipeline's filed rates are just and reasonable. 21
The KCC agrees that the possibility that a pipeline may file a section 4 rate case after a complaint has been lodged will make potential complainants hesitant about incurring the costs of a section 5 complaint. 22
The KCC further notes the fact that any relief under a section 5 proceeding is limited since it is prospective only and urges the Commission to reinstate a periodic rate-refiling requirement as a condition to approval of pipeline blanket certificates. 23
12. As an initial matter, the Commission has no intention of obscuring the distinction between sections 4 and 5 of the NGA by any changes implemented here to the financial forms filed by natural gas companies. Therefore, the Commission will not reinstate a periodic rate review absent a concomitant benefit as was the case when, in exchange for recovering purchased gas costs through a tracker, pipelines were required to restate their rates every three years. 24
In addition, the Commission rejects the proposal to order companies to file cost and revenue studies as part of these forms. Also, the changes being implemented here do not affect existing rates nor change any rate on file. In like vein, the Commission cannot alter the rights and obligations of pipelines and their customers under sections 4 and 5 of the NGA. Under section 4 of the NGA, a pipeline has the right to file a rate case at any time. The Commission cannot compel a pipeline to file under section 4, nor can it preclude it from filing under section 4 for any reason, including the presence of a section 5 complaint. The pipeline can agree to bind itself, for example through an agreement to a rate moratorium in a rate case settlement, but the Commission does not have the power to prohibit a pipeline from filing a rate case. The requested data is designed to provide the Commission and pipeline customers with information that will aid their ability to make a reasonable assessment of a pipeline's cost of service. Greater transparency is essential to the Commission's oversight responsibilities and, as implemented here, will not affect the burden of proof in section 5 proceedings. A party filing a section 5 complaint would still have the burden to show why the information in the Commission's financial forms support an allegation that the pipeline's existing rates are unjust and unreasonable. Stated briefly, the changes adopted in the final rule will not be used to limit an entity's right under the NGA and our regulations. Nor will the changes to the forms change the Commission's obligation to rule on complaints, petitions, or other requests for relief based on a full record and substantial evidence.
B. Acquisition and Disposition of Gas: Shipper-Supplied Gas
1. Financial Forms NOPR
13. In the NOPR, the Commission noted that despite current accounting and reporting requirements for gas used in operations, gas lost, and gas sold, Forms 2 and 2-A users cannot readily determine the disposition and value of any shipper-supplied gas that exceeds the pipeline's operational needs or the source and cost of any gas acquired to meet deficiencies in shipper-supplied gas. 25
Comments on the NOI identified information regarding the pipeline's fuel retainage percentage as particularly lacking in detail. The complainants in the National Fuel case, referenced above, asserted that the principal reason for the pipeline's alleged excess revenue was due to its retention of more than twice as much fuel from shippers than is necessary to operate the system and that it then sold and retained all revenues from those sales. 26
In light of these concerns, the Commission proposed the addition of a new schedule to Forms 2, 2-A, and 3-Q, which would require the pipeline to report the following: (1) The difference between the volume of gas received from shippers and the volume of gas consumed in pipeline operations each month; (2) the disposition of any excess and the accounting recognition given to such disposition, including the basis of valuing the gas and the specific accounts charged or credited; and (3) the source of gas used to meet any deficiency, including the accounting basis of the gas and the specific account(s) charged or credited. 27
In addition, the NOPR proposed to add page 520 (Gas Account-Natural Gas) to Form 3-Q in order to provide more timely reporting of the quantity of natural gas received and delivered by the pipeline. 28
The NOPR also proposed to require pipelines to provide in a footnote to page 520, the volumes of gas purchased applicable to each of the gas pipeline expense accounts. 29
2. Commenters
14. Most commenters support the addition of this information to Forms 2, 2-A, and 3-Q. INGAA and Williston Basin Interstate Pipeline Company (Williston), however, request that the Commission revise pages 521a and 521b to remove the monthly reporting requirement and replace it with a quarterly reporting requirement. 30
INGAA also requests that the Commission revise its proposal to remove the requirement that pipelines categorize the discrete offsetting gas transactions of any excess or deficiency related to shipper supplied gas. 31
Dominion requests that the Commission modify the proposal to require the new reporting on shipper-supplied gas on only an annual basis and not in quarterly reports. 32
15. The American Gas Association (AGA) supports the NOPR's proposal to require this information but believes that greater clarity can be achieved if the Commission requires the information to be broken out by function (e.g., transportation, storage, gathering, etc.) and to include, by function, the amount of fuel that has been waived, discounted or reduced as part of a negotiated rate agreement. 33
The Natural Gas Supply Association (NGSA) requests that a column be added to proposed page 521 to require pipelines to identify the specific accounts being used to record the various sources and disposition of fuel gas. 34
In NGSA's view, this information would enable users to reconcile the volumes broken out by account reported on proposed page 521 to data recorded elsewhere in Forms 2, 2-A and 3-Q. 35
Calpine Corporation (Calpine) requests that the Commission require the fuel gas accounts to be broken down by month so that these costs can be reconciled with those reported in other filings such as annual fuel tracker reports. 36
3. Commission Determination
16. As stated in the NOPR, the Commission is concerned about the increased impact on the pipeline's cost of service resulting from rising gas prices. 37
The escalation of gas prices coupled with the decline of section 4 rate reviews has made this an important issue in the pipeline's cost of transportation. Currently, Forms 2 and 2-A users cannot determine the disposition and value of any shipper-supplied gas that exceeds the pipeline's operational needs or the source and cost of any gas acquired to meet deficiencies in shipper-supplied gas. While we recognize INGAA's desire that the data be reported on a quarterly, and not monthly basis, we agree with Calpine that monthly data is necessary for the purpose of comparing and attempting to reconcile these costs with other routine pipeline filings such as annual fuel tracker reports. In addition, INGAA objects to the requirement that pipelines categorize the discrete offsetting gas transactions relating to any excess or deficiency in shipper-supplied gas. The Commission deems this information critical to the clarity and transparency needed to support a reasonable analysis of gas costs. The information broken out by function (e.g., transportation, storage, gathering, etc.) sought by AGA is available in Form 2 at page 520. On page 520 (Gas Account), pipelines are required to provide detailed information regarding gas received and delivered by the pipeline, identified by function and account number. Regarding NGSA's request that a column be added to page 521 to require pipelines to identify the specific accounts being used to record the various sources and disposition, we reject it as unnecessary. Pages 521a and 521b already require in columns (d) and (e) that the specific account(s) be identified. The NOPR's proposals are designed to provide needed transparency but also to reflect a fair balance between the need for the information and the additional burden on the pipeline. We believe that the new schedules (pages 521a and 521b) proposed in the NOPR reflect this balance. Accordingly, the proposal is adopted as outlined in the NOPR.
C. Other Gas Dispositions
1. Financial Forms NOPR
17. The NOPR proposed to expand the detail provided on pages 300-01 of Forms 2 and 2-A (Gas Operating Revenues) to require filers to report sales amounts reported in Account 480 (Residential Sales); Account 481 (Commercial and Industrial Sales); Account 482 (Other Sales to Public Authorities); Account 483 (Sales for Resale); and Account 484 (Interdepartmental Sales). Currently this schedule, entitled “Gas Operating Revenues,” aggregates on one line all sales data for these separate accounts. Providing this data by account, rather than in an aggregated number, will enable users to identify the dispositions of gas acquired by or tendered to the pipeline and how those transactions may affect the pipeline's cost of service. In addition, the NOPR proposed to modify the schedule for Account 495, Other Gas Revenues, on page 308 of Form 2 and add a new page to Form 2-A to specify that the following types of revenues must be separately reported on the schedule: (1) Commissions on sale or distribution of gas of others; (2) compensation for minor or incidental services provided for others; (3) profit or loss on sale of material and supplies not ordinarily purchased for resale; (4) sales of steam, water, or electricity, including sales or transfers to other departments; (5) miscellaneous royalties; (6) revenues from dehydration and other processing of gas of others except as provided for in the instructions to Account 495; (7) revenues for rights and/or benefits received from others which are realized through research, development, and demonstration ventures; (8) gains on settlements of imbalances receivable and payables; (9) revenues from penalties earned pursuant to tariff provisions, including penalties associated with cash-out settlements; and (10) revenues from shipper-supplied gas.
2. Commenters
18. NGSA states that the information on pages 300-01 of the forms could be made more useful by requiring pipelines that use these accounts to add footnotes detailing the type of transaction(s) being reported. 38
NGSA argues that the activities listed under these accounts are outdated and the Commission should require additional detail. 39
NGSA also requests that to the extent a pipeline has revenues associated with items not listed for Account 495 on page 308 of Form 2, the pipeline be required to specify each such type and amount of revenue on a separate line under line 11 and provide sufficient detail for customers to identify the accounts to which these revenues are attributable. 40
The Independent Petroleum Association of America (IPAA) and the Texas Independent Producers and Royalty Owners Association (TIPRO) also request that pipelines that continue to use Account Nos. 480-484 be required to add footnotes on revised pages 300-301 of Form 2 detailing the type of transaction(s) reported. 41
Finally, Calpine suggests the addition of a revenue category to page 308 for purposes of capturing any environmental credits earned by the pipeline. 42
3. Commission Determination
19. The NOPR proposed the disaggregation of this revenue data to enable the Commission and the forms' users to achieve a meaningful understanding of the nature of the business activities from which the revenues are derived. The Commission recognized that greater detail concerning these revenue accounts could provide data that would enable the Commission and pipeline customers to identify the dispositions of gas acquired by or tendered to the pipeline and how these transactions may affect the pipeline's cost of service. To that end, the NOPR proposed a new schedule which requires a breakdown of revenue into ten categories. The NOPR addressed many of the issues raised by NGSA, IPAA and TIPRO and we believe that the additional detail sought by these parties would add unnecessary burden to this new reporting requirement. We agree with Calpine that identifying environmental credits received by the pipeline is useful and important information. Rather than add a new revenue category to page 308, we will require pipelines that receive environmental credits to list those credits in a footnote to the Financial Statements.
D. Affiliate Transactions
1. Financial Forms NOPR
20. The NOPR proposed that pipelines be required to provide detailed information regarding affiliate transactions. The Commission agreed with the form users' assertions that currently, Forms 2 and 2-A do not require any reporting of affiliate transactions and that disclosures of affiliate transactions are needed to prevent cross-subsidization between regulated and unregulated companies. The NOPR proposed to add a new schedule, page 358, to both Forms 2 and 2-A entitled “Transactions with Associated (Affiliated) Companies” that would require filers to report affiliate transactions. The NOPR proposed that filers be required to report the following: (1) A description of the good or service transacted; (2) the name of the associated (affiliated) company; (3) the FERC account charged or credited; and (4) the amount charged or credited. The NOPR proposed that where amounts billed to or from an affiliate are based on an allocation process, filers be required to explain the basis of the allocation in a footnote. The NOPR also proposed to amend the existing instructions for page 357, Charges for Outside Professional and Other Consultative Services, to exclude affiliate transactions, and remove the existing $250,000 threshold for reporting services.
2. Commenters
21. INGAA, AGA, Williston, Kinder Morgan Interstate Pipelines (Kinder Morgan) and other commenters ask the Commission to reconsider the proposed removal of the $250,000 cost threshold for the reporting of non-affiliated “Charges for Outside Professional and Other Consultative Services” on page 357 of Form 2. 43
INGAA and Williston assert that eliminating the threshold will add a significant burden to Form 2 filers without adding a significant benefit to the form's users. 44
For similar reasons, AGA and Williston also recommend that the $250,000 cost threshold be applied to the new schedule for affiliate transactions. 45
AGA requests that the Commission clarify that the required affiliate information be limited to transactions between a jurisdictional entity and its affiliates and not include transactions solely between affiliated entities that are not subject to the Commission's reporting requirements. 46
Dominion asks the Commission to clarify that when an affiliate provides a service on an on-going basis, only a single line entry describing that service is required. 47
3. Commission Determination
22. The Commission agrees that elimination of the $250,000 cost threshold for page 357 of Forms 2 and 2-F and the absence of a similar threshold for the new schedule for reporting affiliate transactions may add a substantial burden to the forms' filers. Accordingly, we will reinstate the $250,000 cost threshold on page 357 (Charges for Outside Professional and Other Consultative Services) and add an instruction to the new schedule on page 358 (Transactions with Associated (Affiliated) Companies) to require reporting of amounts in excess of $250,000. However, in order to ensure full reporting of these expenses, we will add a requirement for pages 357 and 358 that the filer must provide the total amount of all services amounting to $250,000 or less. As requested by AGA, we clarify that affiliate transactions reported are limited to transactions between a jurisdictional entity and its affiliates. Finally, in response to Dominion's request, we clarify that when an affiliate provides an on-going service, only a single line entry describing that service is required.
E. Incremental Pricing Policy
1. Financial Forms NOPR
23. The NOPR proposed to add a new schedule to Forms 2 and 2-A (page 217), entitled “Non-Traditional Rate Treatment Afforded New Projects,” to collect information regarding a company's individual rate treatments for services. The necessity for more information regarding rate treatment for new pipeline construction arose as a result of the evolution of the Commission's pricing policy for pipeline capacity expansions, due in part to the changes in the industry brought by Order No. 636. The “rolled-in” rate treatment approach for pipeline capacity pricing, where added facilities were integrated into the pipeline's mainline system to the benefit of all customers, has changed as Commission policy now requires that a pipeline be prepared to financially support expansion projects without relying on subsidization from existing customers. 48
Where incremental rates for new capacity have been approved, the Commission has required pipelines to maintain their accounting records so as to be able to identify the facilities and related costs used to provide service to the incremental rate customers. 49
To date, however, the Commission has not required the disaggregation of these costs in Forms 2 and 2-A. The NOPR proposed that a proper rate assessment would be enhanced by providing a breakdown of costs related to these separate facilities. The NOPR proposed to add a new schedule to Forms 2 and 2-A, at page 217, entitled “Non-Traditional Rate Treatment Afforded New Projects,” to report the following: (1) The name of the facility; (2) the docket number under which the facility was approved; (3) the type of rate treatment (e.g., incremental or another rate treatment); (4) the amount of plant in service; (5) the amount of accumulated depreciation; (6) the amount of accumulated deferred income taxes; (7) amount of operating expenses; (8) the amount of maintenance expenses; (9) the amount of depreciation expense; (10) incremental revenues; and (11) other expenses.
2. Commenters
24. Most commenters supported the addition of this requirement. Calpine requests that the list of required information be expanded to include other items such as incremental fuel treatment and project financing. 50
Calpine asserts that this separate recording of incremental costs and functions should be expanded throughout the proposed modifications to Forms 2 and 2-A. 51
Dominion states that the Commission should exempt from these new reporting requirements LNG import projects authorized on a “proprietary” basis with deregulated rates under the Energy Policy Act of 2005 (EPAct 2005) and the Commission's “Hackberry” policy. 52
3. Commission Determination
25. Calpine's request for additional information is granted in part. We agree that if incremental projects charge a separate fuel rate rather than using the systemwide fuel rate, the pipeline should identify the volumes received and used for a particular incremental project. We will require this information to be provided in a footnote to the report with the information identified for each incremental project to which the requirement applies. Further, we deny Calpine's request for information related to project financing. The Commission generally approves rates for incremental projects designed on the rate of return approved in the pipeline's last rate case; thus, the information is not necessary. 53
With that addition, we adopt the new requirements proposed in the NOPR. Further, we clarify that this rule does not affect any waivers or exemptions from filing requirements granted previously by the Commission.
F. Discounted and Negotiated Rate Services
1. Financial Forms NOPR
26. The NOPR proposed to add a new schedule, page 313, entitled “Discounted Rate Services and Negotiated Rate Services,” to Forms 2 and 2-A to require pipelines to report the revenues and volumes applicable to discounted and negotiated rate services provided during the reporting period. Currently, Form 2 filers report the dollar amounts and volumes associated with the type of transportation provided. These are pages 300-01, Gas Operating Revenue; pages 302-03, Revenues from Gas Transportation of Others Through Gathering Facilities; pages 304-05, Revenues from Gas Transportation of Others Through Transmission Facilities; pages 306-07, Revenues from Storing Gas of Others; and page 308, Other Gas Revenues. However, the current schedules do not require filers to identify the volumes and revenues applicable to discounted, negotiated, or recourse rates. The Commission believes that since individual pipelines may provide services from the same facilities using different rates, it is important for the Commission and the pipeline customer to know the level of services provided under each rate schedule in order to protect against cross-subsidization and to ensure that recourse rates remain just and reasonable.
2. Commenters
27. One commenter, Calpine, requests that the Commission further clarify that filers of this schedule be required to complete a separate chart for each incremental vintage so that the revenues and volumes can be appropriately attributed. 54
3. Commission Determination
28. The Commission believes that the proposed schedule described in the NOPR, requiring filers to report the revenues and volumes associated with the types of transportation provided, is adequate for purposes of assessing rates to prevent cross-subsidization and to ensure the justness and reasonableness of recourse rates. The Commission finds that the additional information requested by Calpine would add unnecessary burden to the pipeline's reporting requirements. Accordingly, the modification is accepted as outlined in the NOPR.
G. Rate Base and Other Cost of Service Components—Deferred Income Taxes
1. Financial Forms NOPR
29. The NOPR proposed to add an instruction to each deferred income tax schedule, as listed below, requiring the pipeline to provide a summary of the type and amount of deferred income taxes reported in the beginning-of-year and end-of-year balances for deferred income taxes used to develop jurisdictional recourse rates. At present, Form 2 filers are required to report only a single line of data for the total deferred income tax balance related to gas operations on the following schedules: (1) Accumulated Deferred Income Taxes (Account 190), pages 234-35; (2) Accumulated Deferred Income Taxes—Other Property (Account 282), pages 274-75; and (3) Accumulated Deferred Income Taxes—Other (Account 283), pages 276-77. Deferred income tax balances are an important factor in determining rate base and evaluating a pipeline's earned rate of return. The level of detail now required in Form 2 for deferred income taxes related to gas operations does not provide sufficient information to enable customers to evaluate the pipeline's current rates. The NOPR also proposed to add these deferred tax reporting schedules to Form 2-A to allow all pipeline customers access to this information.
2. Commenters
30. Calpine asks the Commission to clarify that the reporting of deferred income taxes should be done on a disaggregated basis when possible. 55
Williston, on the other hand, argues that due to the subjectivity of deferred income taxes, speculation on which deferred income taxes are included in rate base is a subject more appropriately addressed in a rate case. 56
3. Commission Determination
31. Contrary to Williston's concern, the NOPR's proposal does not require speculation on the part of the pipeline. The proposal would simply require the pipeline to provide an estimate for the deferred income tax accounts for the immediate reporting year, and to provide a summary of the end-of-year and beginning of year balances for the reported amounts. These estimates are not binding on the pipeline at such time as it may file a section 4 rate case. Customers need this information in order to assess the reasonableness of the rates currently paid. With respect to Calpine's request that reporting of deferred income taxes be done on a disaggregated basis when possible, we believe that the required summary of the type and amount of deferred income taxes reported in the beginning-of-year and end-of-year balances will provide adequate detail. Accordingly, the proposal as outlined in the NOPR is adopted.
H. State Income Tax Expense
1. Financial Forms NOPR
32. The NOPR proposed to add a new column Q to the Taxes Accrued, Prepaid and Charged During Year, Distribution of Taxes Charged schedule on pages 262-3 of Form 2 and to add the same schedule to Form 2-A to require pipelines to report state and local income tax rates. Currently, only the aggregate state deferred income tax for the entire reporting entity is required to be reported on Form 2. This information does not permit the Commission or the pipeline's customers to determine the amount of state income tax expense that should be associated with the before-tax net income generated from the sales of transportation services under more than one rate structure.
2. Commenters
33. The American Public Gas Association (APGA) requests that the Commission add the requirement that pipelines include the property valuation used by taxing authorities. 57
3. Commission Determination
34. The Commission believes that the proposal to require pipelines to report the state and local income tax rates is sufficient to aid the forms' users in interpreting the data. We reject APGA's request that pipelines include the property valuation used by taxing authorities. We believe that access to disaggregated data will provide the necessary information. Accordingly, the proposed change outlined in the NOPR is adopted.
I. Regulatory Assets and Liabilities
1. Financial Forms NOPR
35. The NOPR proposed to revise the schedule entitled “Other Regulatory Assets,” page 232, by adding footnote citations for each regulatory asset to record the item and adding a column to identify amounts written off during the period as non-recoverable. In addition, the NOPR proposed to revise the “Other Regulatory Liabilities” schedule, page 278, by adding footnote citations for each regulatory liability to identify the regulatory approval to refund the item and adding a column to identify amounts written off during the period as non-refundable. At present, Forms 2 and 2-A filers are required to report a breakout of regulatory assets and liabilities where future recovery/refunding from ratepayers is probable. These amounts, however, can be challenged in a section 4 rate case proceeding. The proposed revisions will allow the Commission and customers to determine which assets and liabilities have been written off or refunded during the reporting period.
2. Commenters
36. Dominion argues that the regulatory assets and liability information should not be included in the Form 3-Q, but only in the annual report. 58
The MPSC suggests that the Commission modify its proposal to require pipelines to report the asserted basis for recording a regulatory asset or liability, including, but not limited to, any regulatory approval to record the item. 59
3. Commission Determination
37. The Commission believes that the footnote citations proposed in the NOPR will provide a level of detail sufficient to enable the forms' users to assess the pipeline's reporting for regulatory assets and liabilities. We believe it is unnecessary and burdensome to require the pipeline to report the basis for recording the asset or liability together with a citation to any regulatory approval. As drafted, the NOPR would require the pipeline to identify any regulatory approval to refund an item and to record such refund. We believe this data provides the forms' users with the information necessary to determine which pipeline assets have been written off or refunded during the relevant reporting period. Accordingly, the proposal as outlined in the NOPR is adopted.
J. Employee Pensions and Benefits
1. Financial Forms NOPR
38. The NOPR proposed to amend Instruction 3 to page 122.1 to require filers that participate in multi-employer post-retirement benefit plans to disclose the amount of cost recognized in the filer's financial statements for each plan for the period presented and the basis for determining the filer's share of the total plan costs. In addition, the NOPR proposed to add a schedule entitled ``Employee Pensions and Benefits,'' page 352, to both Forms 2 and 2-A, to provide additional details about the types and costs of employee benefits. At present, this information is not readily available in Forms 2 and 2-A, due in part to the pipelines' participation in multi-employer benefit plans in which they are assigned a portion of the total cost, and the flexibility in the way in which information is described in a footnote disclosure. The NOPR would permit forms users to assess the cost of employee benefits and better compare this information between periods and entities.
2. Commenters
39. The MPSC requests that the Commission require pipelines to report the recommended/required contributions to pension and post-retirement benefits other than pensions (PBOP) funds identified by the pipelines' actuaries and reconcile any differences between these recommended contribution amounts and the cost recognized on the pipelines' financial statements. 60
Further, MPSC requests that pipelines also be required to reconcile any difference between the actuary's recommended contribution and the amounts reported in Account 926. 61
3. Commission Determination
40. The Commission believes that the proposed changes are reasonable and respond adequately to the request for additional information on pensions and benefits. The NOPR's proposal would require filers to disclose the amount of costs for benefit plans and the basis for determining the filer's share of the total cost. We believe this level of detail is sufficient and reject as burdensome MPSC's request that pipelines provide a reconciliation between costs recommended by an actuarial and costs adopted. The MPSC's request for reconciliation is the basis of review in a rate case for employer pension and PBOPs. Accordingly, the proposed change in the NOPR is adopted.
K. Other Issues
Source of Capital Structure
1.Financial Forms NOPR
41. The NOPR rejected requests that pipelines be required to provide additional detail on capital structure. 62
The Industry Coalition's request for additional capital structure information included the requirement that if the pipeline believes an alternative capital structure should be used for rate purposes, the appropriate capital structure should be included in a footnote along with an explanation of why another capital structure is appropriate. 63
The NOPR rejected this request on the grounds that it would require the pipeline to speculate on a preferred capital structure. 64
2. Commenters
42. Several commenters, including NGSA, APGA, Calpine, Enbridge, and Process Gas Consumers Group (PGC), urge the Commission to reconsider its ruling and to require pipelines to identify the specific entity used as the source for the capital structure figures reported on page 218a. 65
PGC, APGA, NGSA and others observe that INGAA's reply comments in response to the NOI stated that it has no objection to identifying the entity whose capital structure is reported on page 218a of Form 2. 66
3. Commission Determination
43. In light of the comments on this issue, including the recognition that INGAA stated that it had no objection to identifying the entity whose capital structure is reported on page 218a of the form, the Commission will revise the instructions for page 218a of Form 2. The reporting pipeline will be required to provide, in a footnote, the name of the entity whose capital structure is reported. We reiterate, however, that the pipeline will not be required to identify whether it plans to use a different capital structure and an explanation of its appropriateness.
Reporting the Source of Return on Equity Figures
1. Financial Forms NOPR
44. The NOPR rejected proposals to add additional requirements to the current return on equity disclosure. At present, page 218a of Form 2 requires that the pipeline provide the rate of return granted in the last rate proceeding. If this rate of return is not available, the form requires the pipeline to use the average rate of return earned during the preceding three years. The NOPR expressed concern that adding additional disclosures, including the pipeline's calculation of the three year average rate of return, would be burdensome to the pipelines and could have the unintended effect of turning the Form 2 into a “mini” rate case. 67
2. Commenters
45. APGA, NGSA, and PGC request that the Commission reconsider this decision. 68
At a minimum, PGC requests that the Commission require pipelines to document whether they have elected to use the FERC-approved rate of return on equity or a three-year average. 69
APGA requests that page 218a of Form 2 be amended to include a mandatory disclosure of whether the listed return on equity is from the pipeline's most recent rate proceeding (and if so, to identify such proceeding by docket number and reference to any applicable documents and/or Commission order), or if not, a description of the calculation used to derive the listed rate of return. 70
APGA asserts that this approach would provide the public with vital information while not encumbering pipelines with any additional burden. 71
NGSA states that INGAA's reply comments to the NOI indicated that it did not object to providing which option was used for purposes of the rate of return, with the caveat that a “black box” settlement figure be viewed as an acceptable proxy for the pipeline's approved rate of return. 72
NGSA urges the Commission to adopt INGAA's suggested compromise to document which option is reported. 73
3. Commission Determination
46. The Commission agrees that it would be a fair compromise to require that pipelines disclose the following information when reporting common equity at line (5), column (d), on page 218a: (1) Indicate if the rate of return was formally approved in a rate case; (2) indicate if the rate of return was a calculated black-box settlement approved rate; or (3) if the rate of return was an actual three-year average rate of return. This information should provide sufficient clarification for the form's users and will not, we believe, unduly burden the pipeline's reporting requirements.
Costs and Revenues Associated With Trackers or Special Surcharges
1. Commenters
47. The New York Public Service Commission (NYPSC) states that it supports the Commission's proposed amendments to Forms 2, 2-A, and 3-Q. NYPSC requests, however, that the Commission address its suggestions for additional reporting requirements on Form 2, including billing determinants for each rate schedule at the beginning and end of the year, as well as any revenues and costs associated with trackers or special surcharges. 74
2. Commission Determination
48. NYPSC's comments did not identify the items subject to tracking or special surcharges. The Commission does not believe that a specific cost and revenue analysis of these revenues is required since, with the exception of some timing differences, the transactions generally should be a wash, i.e., the reported revenues would include the surcharge recoveries and the pipeline's operation and maintenance expenses would reflect the costs incurred. We do agree that it would be beneficial to have a summary of the revenues and expenses for each tracked cost and special surcharge. Therefore, the Commission is adding this requirement to the final rule. We will require that the pipeline provide this summary in the footnotes to the financial statements. We decline to grant NYPSC's request to require the pipeline to include billing determinants for each rate schedule at the beginning and end of the year. This information is available on the Index of Customers, filed by pipelines on a quarterly basis.
L. Elimination of Form 11
1. Financial Forms NOPR
49. The NOPR sought comments on whether the information in FERC No. 11, Natural Gas Pipeline Company Quarterly Statement of Monthly Data (Form 11) is relied upon by pipeline customers. The NOPR also asked whether the information reported in Form 11 could, alternatively, be incorporated into Form 3-Q. Form 11 is a quarterly filing made by natural gas companies whose gas transported or stored for a fee exceeded 50 million Dth in each of the three previous years. 75
In comments on the NOI, Williston had suggested that Form 11 be eliminated and that the information required in Form 11 be incorporated into Form 3-Q. 76
2. Commenters
50. Most commenters expressed a need for the information reported in Form 11. NGSA, Calpine, the IPPA and TIPRO oppose the elimination of the form unless the information reported is added to Forms 2 and 3-Q, with the assurance that this alternative would maintain the monthly volume detail currently provided in Form 11. 77
NGSA stated that the information reported in Form 11 is the only source of contract demand and volume information that enables customers to properly attribute costs to incremental services and design rates. 78
One commenter, Dominion, asserted that the information reported in Form 11 is unnecessary but stated that if the Commission deems that such information needs to be reported, Form 11 should be incorporated into Forms 2 and 3-Q. 79
3. Commission Determination
51. The comments indicate that Form 11 information is unique and useful for performing a reasonable rate assessment. We agree with NGSA and others that eliminating Form 11 without incorporating the detail in other forms would remove from consideration data that is not available elsewhere. We believe that the most efficient way to collect the information now reported in Form 11 is to add a new schedule to Forms 2 and 3-Q, entitled “Monthly Quantity Revenue Data by Rate Schedule,” to require the reporting of information now contained in Form 11. An additional benefit of this change in reporting is that the data collected in Form 11 can now be filed using Commission issued software as part of the Form 2 filing rather than as a separate submission. Accordingly, FERC Form 11 will be terminated on February 29, 2009, the date that pipelines will be required to file a revised Form 3-Q.
M. Miscellaneous Issues
52. The Commission proposed to extend the filing date for the Certified Public Accountant Certification Statement until May 18 of the following calendar year for natural gas companies. 80
The Commission noted that this proposal would reduce the filing and administrative burden by allowing more time for the company and the certified public accountant to identify and resolve issues that may arise during the course of the examination. 81
No comments were filed on this issue and, accordingly, the proposal is adopted as outlined in the NOPR.
53. The NOPR discussed two questions posed in the NOI: (1) Whether interstate pipelines should be required to notify the Commission when their total sales or transactions fall below the minimum thresholds established in the Commission's regulations such that the pipeline believes that it is no longer subject to the filing requirements; and (2) whether the Commission should require a showing of good cause before granting an extension of time in which to file the reports. 82
Calpine supports the concept that a pipeline should advise the Commission if it believes it does not meet the threshold requirements for reporting. 83
The Commission agrees that notification of non-filing status would be helpful to the Commission and users of Forms 2 and 2-A. Accordingly, at such time as a pipeline now subject to the reporting requirements for either Form 2 or 2-A has, in three consecutive years, experienced volumes and transactions below the threshold levels specified in the Commission's regulations and believes that it is no longer required to file a Form 2 or 2-A, it must notify the Commission of this change. The pipeline must file the notification on the date that the form would otherwise be due. With respect to the requirement that a pipeline must provide good cause when requesting an extension of time in which to comply with the Commission's reporting regulations, the Commission believes that any request for an extension of time must show good cause. Without such a showing, the request may not be granted.
IV. Implementation
54. The NOPR proposed an effective date of January 1, 2008. Accordingly, companies subject to the new requirements would file their revised Form 3-Q beginning with the first quarter of 2009 and their revised Forms 2 and 2-A in 2009 for calendar year 2008. Form 11 data will continue to be collected through 2008 and pipelines will be required to file the form until February 28, 2009, when the revised 3-Q filings will commence. While INGAA did not object to the Commission's proposed effective date, it requests that the Commission recognize that meeting this deadline may be difficult for some pipeline companies. 84
INGAA states that although pipelines will not be required to file their new annual Forms 2 and 2-A reflecting revised data for 2008 until 2009, the changes will require modifications to accounting and computer systems that will need to be in place on January 1, 2008, to capture data for the full year 2008. 85
Enbridge requests that the effective date of the final rule be revised to the first day of the first full calendar quarter that falls at least 90 days after the Commission's issuance of a final rule. 86
55. The Commission proposed the January 1, 2008 effective date so that pipelines' revised Form 2 and 2-A filings, reflecting an entire year of data, could be filed in 2009. Enbridge's suggestion that the effective date be changed to a mid-year calendar quarter would mean that the new Form 2 data for filing year 2009 would be incomplete. The proposals contained in the September 20, 2007 NOPR have not changed substantially in the final rule. The reporting of some information, deemed burdensome by pipeline filers, has been modified. Most of this data will have been collected by the pipeline during the first quarter of 2008 and the Commission does not believe that the necessary changes warrant any delay in the filings required for 2009.
V. Regulatory Flexibility Act Certification
56. The Regulatory Flexibility Act of 1080 (RFA) 87
generally requires a description and analysis of final rules that will have a significant economic impact on a substantial number of small entities. 88
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. Most filing companies regulated by the Commission do not fall within the RFA's definition of small entity.
57. The Commission estimates that there are 74 Major natural gas pipeline companies and 44 Non-major companies that will be affected by the final rule. 89
As we stated in the NOPR, the rule will apply to all interstate natural gas companies subject to the Commission's jurisdiction. While we do not foresee that the Rule will have a significant impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, we will consider granting waivers in appropriate circumstances. In addition, the elimination of Form 11 will further reduce the economic impact on most entities.
58. Accordingly, the Commission certifies that the Rule will not have a significant impact on a substantial number of small entities. As a result, no regulatory flexibility analysis is required.
VI. Environmental Statement
59. Commission regulations require that an environmental assessment or an environmental impact statement be prepared for a Commission action that may have a significant effect on the human environment. 90
However, in 18 CFR 380.4(a)(5), we categorically excluded the type of information gathering required in this Rule from the requirement to prepare an environmental impact statement. Thus, we affirm the finding we made in the NOPR that this final rule does not impose any requirements that might have a significant effect on the human environment and find that no environmental impact statement concerning this rule is required.
VII. Public Reporting Burden and Information Collection Statement
60. The following collections of information contained in this Final Rule have been submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the Paperwork Reduction Act of 1995. 91
The Commission identifies the information provided under Parts 158 and 260 of the Commission's regulations. The Commission is revising the reporting requirements for interstate natural gas companies as contained in the above financial and operational information collections.
Information Collection Statement
Title: FERC Form No. 2, “Annual Report for Major natural gas companies;” FERC Form No. 2-A, “Annual Report for Nonmajor public utilities and licensees; FERC Form No. 3-Q, “Quarterly financial report of electric utilities, licensees, and natural gas companies.”
FERC Form No. 11, “Natural gas pipeline quarterly statement of monthly data.:
Action: Final Rule.
OMB Control Nos.: 1902-0028 (Form 2); 1902-0030 (Form 2-A); 1902-0205 (Form 3-Q), and 1902-0032 (Form 11).
Respondents: Business or other for profit.
Frequency of responses: Quarterly and Annually.
Necessity of the information: This Final Rule prescribes certain modifications to the Commission's financial reports for interstate natural gas companies, Form Nos. 2, 2-A, and 3-Q. The revisions adopted in this Final Rule will increase the forms' usefulness to both the public and the Commission. The Final Rule will improve the usefulness, accuracy and transparency of financial information submitted to the Commission. Expanding the detail of the financial data assists the Commission in carrying out its responsibilities under the NGA to ensure that rates are just and reasonable.
Burden Statement: There are an estimated 44 Nonmajor and 74 Major natural gas companies that will be affected by the Final Rule, for a total of 118 affected respondents. 92
The change in annual public reporting burden per respondent for Form 2, Form 2-A, and Form 3-Q for Major and Form 3-Q for Nonmajor natural gas companies is estimated to be 53, 135, 30, and 21 additional hours respectively. These estimates translate into 83 additional hours for Major natural gas companies annually and 156 additional hours for Nonmajor natural gas companies annually. The corresponding annual aggregate increase per form is: 3,922 additional hours annually for Form 2; 5,940 additional hours annually for Form 2-A; 2,200 additional hours annually for Form 3-Q for Major natural gas companies; and 924 additional hours annually for Form 3-Q for Nonmajor natural gas companies. While the Final Rule increases the estimated total annual burden by 13,006 hours, the Rule eliminates Form 11 which reduces the total annual reporting burden by an estimated 888 hours. If this change is taken into consideration, the annual burden increase would be 12,118 hours. One commenter, Dominion, stated that while it applauds the Commission for striving to achieve a balance between the benefits these revisions will achieve, in assessing pipeline rates, and the imposition of any additional burden on the pipeline, it believes the estimated hours may be too low. 93
No other commenters offered burden estimates. Dominion estimates that the annual report will require an additional 60 hours (the Commission estimates 53 hours) and that preparation of information for Form 3-Q would be about 23 hours per quarter (the Commission estimates seven hours). 94
Dominion also estimates that additional time will be required in the first year to implement, including the required computer programming, the changes in reporting requirements. 95
The Commission agrees that some time will be required to implement the changes, however, the Commission has provided the companies with the software to prepare the financial reports and we believe Dominion's estimates are excessive. Most of the data required by the Final Rule is information that is already collected by the pipeline company. Certain of the schedules added to Form 3-Q are schedules that are currently in the annual forms and require only that this data be reported on a quarterly basis in addition to the annual reports. Further, the Final Rule has modified some requirements that will ease considerably the reporting burden, that is, reinstating the $250,000 cost threshold for page 357 of Form 2, and instating the same $250,000 threshold for new reporting on affiliate transactions on page 358. In addition, the Final Rule eliminates Form 11 which was previously filed in hard copy and incorporates that information into the annual and quarterly forms, thereby allowing the data to be submitted using Commission software. This, too, produces a substantial decrease in burden. We believe that the new, or revised, requirements strike a fair balance between the benefits these changes will facilitate and the imposition of any additional burden on the pipeline.
Internal Review: The Commission has conducted an internal review of the public reporting burden associated with this collection of information and has assured itself, by means of its internal review, that there is specific, objective support for this information burden estimate. Moreover, the Commission has reviewed the collection of information required by this rule and has determined that the collection of information is necessary and conforms to the Commission's plan, as described in this order, for the collection, efficient management, and use of the required information. 96
61. Interested persons may obtain information on the reporting requirements by contacting: Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 [Attention: Michael Miller, Office of the Chief Information Officer, phone: (202) 502-8415, fax: (202) 273-0873; e-mail: Michael.Miller@ferc.gov ]. Comments concerning the collection of information and the associated burden estimates should be sent to the contact listed above and to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission, phone (202) 395-7318, fax: (202) 395-7285].
VIII. Document Availability
62. 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 ( http://www.ferc.gov ) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Washington, DC 20426.
63. From the Commission's Home Page on the Internet, this document is available at the Commission's document management system, e-Library. The full text of this document is available on e-Library in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in e-Library, type the docket number excluding the last three digits of this document in the docket number field.
63. User assistance is available for e-Library and the Commission's Web site during normal business hours. For assistance, please contact FERC Online Support at 1-866-208-3676 (toll free) or 202-502-6652 (e-mail at FERCOn-LineSupport@ferc.gov ) or the Public Reference Room at 202-502-8371, TTY 202-502-8659 (e-mail at public.reference@ferc.gov ).
IX. Effective Date and Congressional Notification
64. This final rule will take effect April 10, 2008, and the revisions to the forms are applicable on January 1, 2008, as proposed in the NOPR, with one exception. While the rule eliminates Form 11, it is important that the data collected in Form 11 continue to be filed with the Commission. Accordingly, pipelines will be required to continue to collect the data and file Form 11 for the remainder of 2008. Form 11 will be eliminated applicable as of February 28, 2009 when information for the fourth quarter of 2008 is filed. The January 1, 2008 applicability date will require Form 2 and 2-A filers to collect the revised data during 2008 and file a revised annual form in 2009 for the 2008 reporting year. Form 3-Q filers will submit a revised 3-Q beginning with the first quarter of 2009. The information now reported in Form 11 will be incorporated into Forms 2 and 3-Q beginning in 2009.
65. The Commission has determined with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB that this final rule is not a major rule within the meaning of section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996. 97
The Commission will submit the final rule to both houses of Congress and the General Accounting Office.
List of Subjects
Administrative practice and procedure, Natural gas, Reporting and recordkeeping requirements, Uniform System of Accounts.
Natural gas, Reporting and recordkeeping requirements.
By the Commission.
Kimberly D. Bose,
Secretary.
In consideration of the foregoing, the Commission amends parts 158 and 260 of Title 18 of the Code of Federal Regulations , as set forth below:
PART 158—ACCOUNTS, RECORDS, MEMORANDA AND DISPOSITION OF CONTESTED AUDIT FINDINGS AND PROPOSED REMEDIES
1. The authority citation for part 158 continues to read as follows:
Authority:
15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7102-7352.
2. Section 158.11 is revised to read as follows:
§ 158.11
Each natural gas company not classified as Class C or Class D prior to January 1, 1984 must file with the Commission by May 18 of the following calendar year, a letter or report of the independent accountant certifying approval, covering the subjects and in the format prescribed in the General Instructions of the applicable Form No. 2 or Form No. 2-A. The letter or report must also identify which, if any, of the examined schedules do not conform to the Commission's requirements and must describe the discrepancies that exist. The Commission will not be bound by the certification of compliance made by an independent accountant under this paragraph.
PART 260—STATEMENTS AND REPORTS (SCHEDULES)
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.
4. Section 260.3 is removed.
Note:
The following appendices will not be published in the Code of Federal Regulations.
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[FR Doc. E8-6495 Filed 4-9-08; 8:45 am]
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