Proposed Rule2025-20762
Five-Year Review of the Oil Pipeline Index
Primary source
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Published
November 24, 2025
Issuing agencies
Energy DepartmentFederal Energy Regulatory Commission
Abstract
The Federal Energy Regulatory Commission (Commission) invites comments on its proposed index level used to determine annual changes to oil pipeline rate ceilings. The Commission proposes to use the Producer Price Index for Finished Goods (PPI-FG)-1.42% as the index level for the five-year period commencing July 1, 2026. The Commission invites interested persons to submit comments regarding this proposal and any alternative methodologies for calculating the index.
Full Text
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<title>Federal Register, Volume 90 Issue 224 (Monday, November 24, 2025)</title>
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[Federal Register Volume 90, Number 224 (Monday, November 24, 2025)]
[Proposed Rules]
[Pages 52902-52908]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20762]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 342
[Docket No. RM26-6-000]
Five-Year Review of the Oil Pipeline Index
AGENCY: Federal Energy Regulatory Commission, Department of Energy.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) invites
comments on its proposed index level used to determine annual changes
to oil pipeline rate ceilings. The Commission proposes to use the
Producer Price Index for Finished Goods (PPI-FG)-1.42% as the index
level for the five-year period commencing July 1, 2026. The Commission
invites interested persons to submit comments regarding this proposal
and any alternative methodologies for calculating the index.
DATES: Initial Comments are due December 24, 2025, and Reply Comments
are due January 14, 2026.
ADDRESSES: Comments, identified by docket number, may be filed in the
following ways. Electronic filing through <a href="http://www.ferc.gov">http://www.ferc.gov</a>, is
preferred.
<bullet> Electronic Filing: Documents must be filed in acceptable
native applications and print-to-PDF, but not in scanned or picture
format.
[[Page 52903]]
<bullet> For those unable to file electronically, comments may be
filed by USPS mail or by hand (including courier) delivery.
[cir] Mail via U.S. Postal Service Only: Addressed to: Federal
Energy Regulatory Commission, Secretary of the Commission, 888 First
Street NE, Washington, DC 20426.
[cir] Hand (Including Courier) Delivery: Deliver to: Federal Energy
Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
The Comment Procedures Section of this document contains more
detailed filing procedures.
FOR FURTHER INFORMATION CONTACT:
Monil Patel (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-8296. <a href="/cdn-cgi/l/email-protection#327f5d5c5b5e1c625346575e72545740511c555d44"><span class="__cf_email__" data-cfemail="7e3311101712502e1f0a1b123e181b0c1d50191108">[email protected]</span></a>.
Evan Steiner (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, (202) 502-8792. <a href="/cdn-cgi/l/email-protection#f3b685929ddda087969a9d9681b395968190dd949c85"><span class="__cf_email__" data-cfemail="0f4a796e61215c7b6a66616a7d4f696a7d6c21686079">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
1. The Commission annually applies an index to existing oil
pipeline transportation rate ceilings to establish new rate ceiling
levels.\1\ The Commission reexamines the index level every five
years.\2\ In this notice of proposed rulemaking (NOPR), the Commission
invites comments on its proposal to use the Producer Price Index for
Finished Goods (PPI-FG) \3\ minus 1.42% (PPI-FG-1.42%) as the index
level for the next five years beginning July 1, 2026.\4\
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\1\ Indexing allows oil pipelines to change their tariff rates
so long as those rates remain at or below certain ceiling levels. 18
CFR 342.3(a).
\2\ The five-year index review process was established in Order
No. 561. See Revisions to Oil Pipeline Reguls. Pursuant to the
Energy Pol'y Act of 1992, Order No. 561, 58 FR 58753 (Nov. 4, 1993),
FERC Stats. & Regs. ] 30,985 (1993) (cross-referenced at 65 FERC ]
61,109), order on reh'g, Order No. 561-A, 59 FR 40243 (Aug. 8,
1994), FERC Stats. & Regs. ] 31,000 (1994) (cross-referenced at 68
FERC ] 61,138), aff'd, Ass'n of Oil Pipe Lines v. FERC, 83 F.3d 1424
(D.C. Cir. 1996) (AOPL I).
\3\ The PPI-FG is determined and issued by the Bureau of Labor
Statistics, U.S. Department of Labor.
\4\ See Attach. A, Ex. 1 tab.
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2. As discussed below, interested persons are invited to submit
comments regarding the Commission's proposal and any alternative
methodologies for calculating the index level. The Commission will
finalize the index level at the conclusion of this proceeding. In
accordance with 5 U.S.C. 553(b)(4), a summary of this rule may be found
at <a href="http://www.regulations.gov">www.regulations.gov</a> by searching for ``RIN 1902-AG33.''
I. Background
3. The Energy Policy Act of 1992 (EPAct 1992) required the
Commission to establish a ``simplified and generally applicable''
ratemaking methodology that was consistent with the just and reasonable
standard of the Interstate Commerce Act.\5\ To implement this mandate,
the Commission issued Order No. 561 establishing an indexing
methodology that allows oil pipelines to change rates based upon an
annual index as opposed to making cost-of-service filings.\6\ The use
of an industry-wide index avoids expensive and time-consuming
proceedings associated with cost-of-service ratemaking and litigation
for individual pipelines while still allowing pipelines to efficiently
set rates that are commensurate with industry-wide costs. Furthermore,
updating the index every five years to reflect oil pipeline industry
costs changes helps ensure that rates are just and reasonable for
shippers and pipelines. Each year, pipelines adjust their rate ceilings
effective July 1 using an index multiplier that the Commission
publishes in May based on recent changes in the PPI-FG (a measure of
inflation) and the current index level.\7\
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\5\ Public Law 102-486, 1801(a), 106 Stat. 2776, 3010 (Oct. 24,
1992), codified at 42 U.S.C. 7172 note.
\6\ Order No. 561, FERC Stats. & Regs. ] 30,985 at 30,947.
\7\ 18 CFR 342.3(d)(1), (2); see also, e.g., Revisions to Oil
Pipeline Regulations Pursuant to the Energy Pol'y Act of 1992, 90 FR
21917 (May 22, 2025), 191 FERC ] 61,134 (2025) (calculating the
index for the July 1, 2025--June 30, 2026, index year using the
index level established in the 2020 five-year review).
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4. In this proceeding, the Commission is conducting its five-year
review of the oil pipeline index level. When the Commission established
indexing in Order No. 561, the Commission committed to review the index
level every five years to ensure that the index level chosen by the
Commission adequately reflects changes to industry costs and to ensure
that oil pipeline indexed rates remain just and reasonable.\8\ The
Commission explained that its responsibilities under the ICA, to both
shippers and pipelines, require monitoring of the relationship between
the change in the chosen index level and the actual cost changes
experienced by industry.\9\ On appeal of Order No. 561, the United
States Court of Appeals for the District of Columbia Circuit (D.C.
Circuit) upheld the indexing methodology based in part on the
Commission's commitment to undertake regular five-year reviews.\10\
Since 2000,\11\ the Commission has conducted a review of the index
level every five years.\12\ While continuing to use PPI-FG
[[Page 52904]]
as the basis of the index level,\13\ the Commission has recalibrated
the index level each time so that it continued to reflect the
relationship between oil pipeline cost changes and PPI-FG.\14\ The
generally applicable changes to the oil pipeline index necessarily
require notice and comment rulemaking.\15\
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\8\ See Order No. 561, FERC Stats. & Regs. ] 30,985 at 30,941
(``To ensure that the operation of the index meets the Commission's
responsibility under the ICA to ensure that rates are just and
reasonable, the Commission will undertake an examination of the
relationship between the annual change in the [PPI-FG-1%] index and
the actual cost changes experienced by the oil pipeline industry
every five years, beginning in the year 2000 upon the availability
of the final index for calendar year 1999.''); id. at 30,947
(``[T]he Commission will review the appropriateness of the index in
relation to industry costs every five years, beginning July 1,
2000.''); id. at 30,951 (``[T]o ensure that the change in [PPI-FG-
1%] continues to fulfill this objective in the future, the
Commission will conduct a periodic review of this index every five
years.''); id. at 30,952 (The Commission ``will review the choice of
the index every 5 years.''); Order No. 561-A, FERC Stats. & Regs. ]
31,000 at 31,093 (``To ensure over time that this nexus between the
changes in the index and the cost changes experienced by the typical
pipeline will be maintained, the Commission will conduct a review of
the PPI-FG index every five years, beginning in the year 2000.'');
id. at 31,099 (The Commission's decision on the index level ``will
be reviewed every five years, beginning with the year 2000.''); id.
at 31,105 (``The concern . . . that under the indexing system
pipeline rates will increasingly diverge from actual pipeline costs
. . . has been addressed by the Commission in its structuring of the
index system. . . . [U]nder the final rule, every five years
beginning in the year 2000, the Commission will examine the
relationship between changes in the index (PPI-1) and actual cost
changes experienced by the oil pipeline industry.''); see also 49
U.S.C. app. 1(5), 2, 3(1).
\9\ Order No. 561, FERC Stats. & Regs. ] 30,985 at 30,952
(``[T]he Commission believes that its responsibilities under the
ICA, to both shippers and pipelines, requires monitoring the
relationship between the [PPI-FG-1%] and the actual cost changes
experienced by the industry. The Commission will use the Form No. 6
information for this purpose, and will review the choice of the
index every 5 years.'').
\10\ AOPL I, 83 F.3d at 1437. See also id. at 1430
(acknowledging the Commission's commitment to ``monitor the index's
ability to track changes in pipeline costs and review the
appropriateness of its choice of index, in light of the just and
reasonable standard of the ICA, every five years'').
\11\ See Five-Year Rev. of Oil Pipeline Pricing Index, 93 FERC ]
61,266, at 61,846 (2000) (2000 Index Review), aff'd in part &
remanded sub nom. Ass'n of Oil Pipe Lines v. FERC, 281 F.3d 239
(D.C. Cir. 2002), order on remand, Five-Year Rev. of Oil Pipeline
Pricing Index, 102 FERC ] 61,195, at P 3 (2003) (2000 Remand Order)
(``The Commission recognized [in Order Nos. 561 and 561-A] that its
responsibilities, to both shippers and pipelines, required it to
monitor the relationship between the change in the PPI-1 index and
the actual cost changes experienced by the industry.''), aff'd sub
nom. Flying J Inc. v. FERC, 363 F.3d 495 (D.C. Cir. 2004).
\12\ Five-Year Rev. of the Oil Pipeline Index, 86 FR 9448 (Feb.
16, 2021), 173 FERC ] 61,245 (2020) (2020 Index Order), order on
reh'g, 87 FR 4476 (Jan. 28, 2022), 178 FERC ] 61,023 (2022) (2022
Rehearing Order), vacated sub nom. Liquid Energy Pipeline Ass'n v.
FERC, 109 F.4th 543, 549 (D.C. Cir. 2024) (LEPA v. FERC); Five-Year
Rev. of the Oil Pipeline Index, 80 FR 81744 (Dec. 31, 2015), 153
FERC ] 61,312 (2015) (2015 Index Review), aff'd sub nom. Ass'n of
Oil Pipe Lines v. FERC, 876 F.3d 336 (D.C. Cir. 2017) (AOPL III);
Five-Year Rev. of Oil Pipeline Pricing Index, 75 FR 80300 (Dec. 22,
2010), 133 FERC ] 61,228 (2010) (2010 Index Review), order on reh'g,
135 FERC ] 61,172 (2011); Five-Year Rev. of Oil Pipeline Pricing
Index, 71 FR 15329 (Mar. 28, 2006), 114 FERC ] 61,293 (2006) (2005
Index Review); 2000 Index Review, 93 FERC ] 61,266; Order No. 561,
FERC Stats. & Regs. ] 30,985 at 30,948-52; Order No. 561-A, FERC
Stats. & Regs. ] 31,000 at 31,093-99.
\13\ Although in some prior five-year reviews various commenters
proposed alternatives to PPI-FG, the Commission has continued to use
PPI-FG.
\14\ See, e.g., 2020 Index Order, 173 FERC ] 61,245 at P 2; 2015
Index Review, 153 FERC ] 61,312 at P 2; 2010 Index Review, 133 FERC
] 61,228 at P 1; 2005 Index Review, 114 FERC ] 61,293 at P 2; 2000
Remand Order, 102 FERC ] 61,195 at P 1.
\15\ See LEPA v. FERC, 109 F.4th at 549 (holding that the
Commission could not revise the index level without adhering to
notice and comment procedures required by the Administrative
Procedure Act).
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5. In Order No. 561 and each successive five-year index review, the
Commission has calculated the index level based upon a methodology
originally developed by Dr. Alfred E. Kahn and modified by the
Commission in subsequent five-year reviews.\16\ The Kahn Methodology
uses pipeline data from Form No. 6, page 700 \17\ from the prior five-
year period to determine adjustments to be applied to the PPI-FG. The
calculation is as follows. Each pipeline's cost change on a per barrel-
mile basis over the prior five-year period (e.g., the years 2019-2024
in this proceeding) is calculated. In order to remove statistical
outliers and spurious data, the Kahn Methodology trims an equal number
of pipelines from the top and bottom of the data set.\18\ The Kahn
Methodology then calculates three measures of central tendency for the
trimmed data sample: the median, the mean, and a weighted mean.\19\ The
Kahn Methodology calculates a composite by averaging these three
measures of central tendency and measures the difference between the
composite and the PPI-FG over the prior five-year period. The index
level is then set at PPI-FG plus (or minus) this differential.
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\16\ The Commission's use of the Kahn Methodology has been
affirmed by the D.C. Circuit. AOPL I, 83 F.3d 1424; Flying J Inc. v.
FERC, 363 F.3d 495.
\17\ 2015 Index Review, 153 FERC ] 61,312 at P 12 (updating the
Commission's calculation of the five-year oil pipeline index to use
page 700 data to measure changing barrel-mile costs), aff'd, AOPL
III, 876 F.3d at 345-46. Page 700 provides summarized interstate
barrel-mile and cost-of-service data consistent with the
Commission's cost-of-service methodology. Id. PP 12-13, 16.
\18\ For example, the Commission has previously trimmed the data
set to the middle 50% (removing the bottom 25% and top 25% of
pipelines) and in 2020, for the 2021-2026 five-year index, changed
to using the middle 80% (removing the bottom 10% and top 10% of
pipelines). 2020 Index Order, 173 FERC ] 61,245 at PP 25-32 (using
the middle 80%); 2015 Index Review, 153 FERC ] 61,312 at PP 42-44
(using the middle 50%); 2010 Index Review, 133 FERC ] 61,228 at PP
60-63 (using the middle 50%); Order No. 561-A, FERC Stats. & Regs. ]
31,000 at 31,096-97 (adopting Dr. Kahn's proposal to use the middle
50%); see also 2005 Index Review, 114 FERC ] 61,293 at P 28
(considering average of the middle 50% and middle 80%); 2000 Remand
Order, 102 FERC ] 61,295 at P 24 (same).
\19\ The weighted mean assigns a different weight to each
pipeline's cost change based on the pipeline's total barrel-miles.
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II. Commission Proposal
6. We propose PPI-FG minus 1.42% as the index level for the five-
year period commencing July 1, 2026. The proposal is based on the Kahn
Methodology as applied to Form No. 6, page 700 data from the 2019
through 2024 period. The Commission's calculations are included in
workpapers included as Attachment A and available in this docket on the
Commission's eLibrary system.\20\ This proposal is subject to change
based on the Commission's review of the record developed in this
proceeding.
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\20\ See infra P 37 (discussing the Commission's eLibrary
system).
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7. We invite interested persons to submit comments regarding the
Commission's proposal and any alternative methodologies for calculating
the index level for the five-year period commencing July 1, 2026.\21\
Commenters may address all issues relating to the calculation of the
index level, including, but not limited to: (i) different data trimming
methodologies; (ii) whether, and if so how, the Commission should
adjust the data set to address the effects of the change in Commission
policy regarding return on equity (ROE); and (iii) whether, and if so
how, the Commission's calculation of the index level should incorporate
recently resubmitted page 700 data for 2019. As discussed further
below, the index level of PPI-FG-1.42% was calculated by trimming the
data set to the middle 80%, using unadjusted ROE, and using pipelines'
originally filed FERC Form No. 6, page 700 data for 2019. The economic
effects of the NOPR proposal and various regulatory alternatives are
shown in the Regulatory Impact Analysis.\22\
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\21\ As discussed below, commenters must file any supporting
workpapers in an acceptable spreadsheet format with all links and
formulas intact. Infra P 35.
\22\ The Regulatory Impact Analysis (RIA) supporting this
rulemaking can be found as a supporting document at
<a href="http://www.regulations.gov">www.regulations.gov</a>.
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A. Trimming of the Data Set
8. As part of each five-year index review, the Commission trims the
data set that it uses to establish the updated index level to remove
outlying data. We propose to set the index level in this proceeding by
trimming the data set to the middle 80% of all oil pipelines. While the
Commission has used various data trimming approaches in the past,\23\
use of the middle 80% is consistent with the Commission's approach in
the most recent 2020 index review.\24\ Although we considered different
data trimming approaches for this five-year review, including using the
middle 50% of the data set, we preliminarily conclude that the middle
80% is the appropriate data set to use in this five-year review for the
reasons discussed below.
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\23\ 2015 Index Review, 153 FERC ] 61,312 at PP 42-44 (using the
middle 50%); 2010 Index Review, 133 FERC ] 61,228 at PP 60-63 (using
the middle 50%); 2005 Index Review, 114 FERC ] 61,293 at P 28
(considering average of the middle 50% and middle 80%); 2000 Remand
Order, 102 FERC ] 61,295 at P 24 (same); Order No. 561-A, FERC
Stats. & Regs. ] 31,000 at 31,096-97 (adopting Dr. Kahn's proposal
to trim the data set to the middle 50%).
\24\ 2020 Index Order, 173 FERC ] 61,245 at PP 25-32 (adopting
the middle 80% for the 2021-2026 cycle). In the 2020 review, the
Commission subsequently granted rehearing to modify the index to use
the middle 50%, but the rehearing order was vacated on procedural
grounds by the D.C. Circuit. See 2022 Rehearing Order, 178 FERC ]
61,023 at PP 43-58, vacated sub nom. LEPA v. FERC, 109 F.4th at 547-
49; see also Revisions to Oil Pipeline Reguls. Pursuant to the
Energy Pol'y Act of 1992, 188 FERC ] 61,173 (2024) (order
reinstating index level based upon the middle 80% following
vacatur).
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9. First, as the Commission explained in the 2020 index review,\25\
it is appropriate to consider more data in measuring industry-wide cost
changes rather than less. The Kahn Methodology determines the index
level by calculating the central tendency of a statistically trimmed
data sample. As a general matter, considering a larger data sample
should enhance the calculation of the central tendency of industry cost
experience.\26\ Furthermore, the middle 80% of the data set in this
record excludes only 40 pipelines out of 196 pipelines in the full data
set and only 6% of industry-wide barrel-miles, providing a robust
sample of industry cost experience.\27\ By contrast, using the middle
50% would exclude an additional 58 pipelines (for a total of 98
pipelines excluded) and 12% of industry barrel-miles from the
Commission's review of industry-wide cost changes over the 2019-2024
period.\28\
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\25\ 2020 Index Order, 173 FERC ] 61,245 at P 26.
\26\ Id.
\27\ Attach. A, Model tab (indicating that trimming to the
middle 80% would reduce the sample from 196 pipelines to 156
pipelines).
\28\ Id. (indicating that trimming to the middle 50% instead of
the middle 80% would reduce the sample from 156 pipelines to 98
pipelines).
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[[Page 52905]]
10. Second, we preliminarily find that ``normal'' cost changes are
best defined using the inclusive data sample embodied in the middle
80%. Prematurely discarding data prior to determining the central
tendency could skew the index such that it does not reflect industry-
wide trends. By using the inclusive data sample in the middle 80%, the
Commission is able to accurately identify the central tendency of
industry-wide cost changes that reflects the ``normal'' cost changes
recoverable by the index.\29\
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\29\ 2020 Index Order, 173 FERC ] 61,245 at P 27.
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11. Accordingly, we preliminarily conclude that the middle 80% is
the appropriate data set to use in the upcoming five-year review cycle.
However, we invite commenters to address whether the Commission should
continue to trim the data set to the middle 80% or adopt an alternative
approach to data trimming. Commenters should explain why their
preferred approach is superior and how it would appropriately address
outliers and spurious or unrepresentative data that could bias the
index calculation in either direction.
B. Treatment of ROE in Data Set
12. In May 2020, the Commission revised its methodology for
determining ROE for oil pipelines. Whereas the Commission had
previously relied solely on the discounted cash flow (DCF) model for
determining ROE, the Commission now averages the results of the DCF and
Capital Asset Pricing Model (CAPM) analyses (ROE Policy Change).\30\
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\30\ The DCF and CAPM models are described in the policy
statement. See Inquiry Regarding the Comm'n's Pol'y for Determining
Return on Equity, 171 FERC ] 61,155, at PP 18, 28, 50 (2020).
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13. We calculated the proposed index level without making any
adjustment to the data in light of the ROE Policy Change. The
Commission has never adjusted ROE in a prior index proceeding. We are
concerned that adjusting the data in light of the ROE Policy Change
would be a complex and difficult endeavor that would be inconsistent
with indexing's purpose as a simplified and streamlined process.\31\
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\31\ In the 2020 Index Order, the Commission declined to adjust
the ROE data due to the difficulty of determining just and
reasonable alternative ROEs for the diverse pipelines in the data
set. The Commission found that ``addressing such complex cost-of-
service issues would improperly complicate and prolong the five-year
review process in violation of EPAct 1992's mandate for simplified
and streamlined ratemaking.'' 2020 Index Order, 173 FERC ] 61,245 at
PP 49-50.
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14. We encourage commenters to address whether, and if so, how, the
Commission should address the ROE Policy Change in the index
calculation. Commenters proposing any adjustment to the data set should
explain why their proposal is consistent with EPAct 1992's dual
mandates for just and reasonable rates and simplified and streamlined
ratemaking. Among other things, to the extent pipelines changed their
reported ROEs as a result of the ROE Policy Change, commenters should
address how that data should be considered in light of indexing's
relationship to recoverable costs under the Opinion No. 154-B
methodology.\32\
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\32\ We acknowledge that in the 2020 Index Order the Commission
adjusted the data to remove the effects on the index level of a
different policy change related to recovery of income tax costs. Id.
PP 16-20. The Commission later found participants' challenges to
this determination persuasive and modified the index level to use
unadjusted data and to incorporate the effects of the policy change
into the index. 2022 Rehearing Order, 178 FERC ] 61,023 at PP 17-36.
However, the D.C. Circuit vacated the rehearing order on procedural
grounds. LEPA v. FERC, 109 F.4th at 547-49. The Commission also
proposed in a Supplemental NOPR to depart from the 2020 Index
Order's holdings on that same income tax issue and to incorporate
the policy change into the index. Supplemental Rev. of the Oil
Pipeline Index Level, 89 FR 84475 (Oct. 23, 2024), 189 FERC ]
61,030, at PP 24-34 (2024). For purposes of considering the ROE
Policy Change and how it affects the index in this proceeding, we
consider anew any issues related to whether the index should
incorporate cost-of-service policy changes. Commenters should not
simply rely upon statements and findings in the 2020 Index Order
related to this matter.
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C. Resubmitted Form No. 6s
15. We also observe that, since April 2025, 61 pipelines have
resubmitted FERC Form No. 6 cost data for 2019 to change the
calculation of the ROE as well as other modifications.\33\ We
considered whether to use pipelines' resubmitted FERC Form No. 6 cost
data for 2019 or whether to rely on pipelines' originally submitted
FERC Form No. 6 cost data. For the reasons discussed below, the index
level proposed in this NOPR relies on pipelines' originally submitted
FERC Form No. 6 cost data.
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\33\ See Appendix (listing 61 pipelines that have resubmitted
their 2020 Form No. 6 since April 2025 to change their page 700 data
for 2019). See also Tallgrass Pony Express Pipeline, LLC, Form No. 6
(filed June 13, 2025) (resubmitting 2019 Form No. 6 to change their
page 700 data for 2019). Many of the changes involved changes to ROE
and capital structure that led to modifications elsewhere on page
700. However, some pipelines made additional changes to other cost
components, such as rate base and operating expenses. See, e.g.,
Sunoco Pipeline L.P., Form No. 6, page 700 (filed Apr. 29, 2025)
(among other modifications, showing an approximately $1 billion
change to rate base); Tesoro High Plains Pipeline Company LLC, Form
No. 6, page 700 (filed Apr. 17, 2025) (among other modifications,
showing an approximately $7 million change to operating costs).
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16. First, the resubmissions were filed five years after the cost
data was originally due to be submitted and include limited
explanations for these changes.\34\ A similarly significant volume of
late filings of Form No. 6 has not arisen in prior five-year review
proceedings, and these filings raise potential concerns about use of
the late-filed data. For example, the late-filed data from many
pipelines filing Form No. 6 updates lack supporting calculations,
instead merely stating that ``[t]he cost of service results have been
updated to reflect the most current interpretation of the FERC
methodology outlined in Opinion No. 154-B, 31 FERC 61,377 (1985), as
modified and clarified by subsequent rulings.'' \35\ Additionally, we
are concerned that use of updated data could introduce biases in the
index calculations because only some pipelines updated their data.
Accordingly, we are not including these late submittals in the
calculation of the index level proposed in this NOPR.\36\ We seek
comment on whether, and if so how, the Commission's calculation of the
index level should incorporate the recently resubmitted page 700 data
for 2019.
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\34\ See, e.g., Mid-America Pipeline Company, LLC, Form No. 6,
page 700 (filed May 6, 2025) (stating ``The cost-of-service results
have been updated to reflect the most current interpretation of the
FERC methodology outlined in Opinion No. 154-B, 31 FERC 61,377
(1985), as modified and clarified by Opinion No. 586.''); Platte
Pipe Line Company, LLC, Form No. 6, page 700 (filed May 2, 2025)
(stating ``2019 and 2020 data has been restated using a revised
return on equity (ROE) calculation consistent with the ROE
methodology approved by the Commission in Opinion No. 586.'').
\35\ See, e.g., Buckeye Pipe Line Transportation LLC June 16,
2025, revisions of 2020 FERC Form 6 report at page 2.
\36\ For informational purposes, see Attach. A, Ex. 4 tab.
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III. Information Collection Statement
17. The information collection requirements contained in this
proposed rule are subject to review by the Office of Management and
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of
1995.\37\ OMB's regulations require approval of certain information
collection requirements imposed by agency rules.\38\
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\37\ 44 U.S.C. 3507(d).
\38\ 5 CFR 1320.11.
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18. This proposed rule affects a currently approved information
collection. Changes described in this proposed rule are non-substantive
and do not change any filing requirements; rather this proposed rule
adjusts an aspect of the calculation that is used in an annual tariff
filing that FERC jurisdictional oil pipelines are required to submit to
the Commission. This aspect of the calculation is reviewed and updated
every five years.
[[Page 52906]]
Summary of Information Collection
Title: FERC-550, Oil Pipeline Tariff Filings & Depreciation
Studies.
Action: Non-substantive change adjusting an aspect of the
calculation that is used in annual oil pipeline tariff filings.
OMB Control Nos.: 1902-0089 (FERC-550).
Respondents: Oil Pipelines.
Frequency of Information Collection: On occasion in compliance with
requirements.
Necessity of Information: The reforms in this proposed rule are
necessary to ensure that the rates of oil pipelines are just and
reasonable.
Internal Review: The Commission has reviewed the reforms and
determined that such reforms are necessary. These reforms conform to
the Commission's need for efficient information collection,
communication, and management within the energy industry. The
Commission has specific, objective support for the burden estimates
associated with the information collection requirements.
Public Reporting Burden: The burden and cost related to filing an
oil pipeline tariff will not change due to this proposed rule. The
currently approved hourly burden for submitting a tariff filing is 7
hours ($721 \39\).
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\39\ The hourly cost used in this calculation is based on the
estimated average annual cost per FERC FTE, including salary +
benefits of $103 per hour, or $214,093 per year.
---------------------------------------------------------------------------
IV. Executive Order 12866 (Regulatory Planning and Review) and
Executive Order 13563 (Improving Regulation and Regulatory Review)
19. Executive Order 12866 (Regulatory Planning and Review), as
amended by Executive Orders 14215 (Ensuring Accountability for All
Agencies) and supplemented by 13563 (Improving Regulation and
Regulatory Review), directs agencies to assess the costs and benefits
of available regulatory alternatives and, if regulation is necessary,
to select regulatory approaches that maximize net benefits. Executive
Order 13563 emphasizes the importance of quantifying costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Office of Information and Regulatory Affairs (OIRA) has designated
this proposed rule a ``significant regulatory action'' that is
economically significant under section 3(f)(1) of Executive Order
12866. Accordingly, OMB has reviewed this proposed rule. The regulatory
impact analysis associated with this rulemaking can be found as a
supporting document at <a href="http://www.regulations.gov">www.regulations.gov</a>. The following represents a
summary of the aforementioned regulatory impact analysis.
20. If adopted in a final rule, the index level proposed in this
NOPR would influence rates for interstate oil pipeline transportation
service, which would affect the interests of interstate oil pipelines
and shippers on interstate oil pipelines.\40\ The RIA considers the
potential impacts of the index level proposed in the NOPR relative to
two baselines.\41\ The first baseline (Baseline 1) assumes that a final
rule establishing a new index level for the 2026-2031 time period is
not issued and assumes that the index level established for 2021-2025
would remain effective for 2026-2031. The second baseline (Baseline 2)
assumes that a final rule establishing an index level for the 2026-2031
time period is not issued, and that there is no effective index level
and pipelines are thus precluded from changing their rates pursuant to
the Commission's indexing regulations for the 2026-2031 period.
Adopting the index level proposed in this NOPR would reduce interstate
oil pipeline transportation revenues during the five-year period that
the index would be effective as compared to Baseline 1 and would
increase oil pipeline revenues during the five-year period that the
index would be effective as compared to Baseline 2.\42\
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\40\ Approximately 350 pipelines file tariff rates with the
Commission for interstate transportation of crude oil and petroleum
products, and approximately 86% of rates are set under the indexing
method. For more information about who is affected by the NOPR, see
section II.C of the RIA.
\41\ See RIA, section II.E.
\42\ For more information about the effects of the NOPR as
compared to Baseline 1 and Baseline 2, see RIA, section II.f. See
also RIA, apps. A, B.
---------------------------------------------------------------------------
21. As discussed in the RIA, the issuance of a final rule adopting
the proposed index level in the NOPR would not create any measurable
costs or benefits outside of these effects experienced by pipelines and
shippers. While there are circumstances in which pipeline
transportation rates can indirectly affect financial interests outside
of pipelines and shippers (for example, lower pipeline transportation
rates could affect commodity prices for refineries, prices of
petroleum, or pipeline infrastructure investment), these impacts are
sufficiently attenuated or otherwise so minimal as to not result in
significant costs.\43\
---------------------------------------------------------------------------
\43\ See id. section II.G.
---------------------------------------------------------------------------
22. The RIA also describes the regulatory alternatives that the
Commission considered and the estimated effects of alternative index
levels on annual interstate oil pipeline transportation revenues as
compared to the baselines. The alternative index levels reflect
different combinations of regulatory alternatives, specifically of
different approaches to the three issues on which we seek comment in
the NOPR.\44\ All of the index levels that result from the various
regulatory alternatives considered in the RIA are higher compared to
the index level proposed in the NOPR.
---------------------------------------------------------------------------
\44\ For further details about the regulatory alternatives
considered by the Commission and their estimated effects on annual
interstate oil pipeline transportation revenues, see RIA, section
II.H, apps. A, B, C, D.
---------------------------------------------------------------------------
V. Executive Order 13132 (Federalism)
23. Executive Order 13132 (Federalism) imposes certain requirements
on Federal agencies formulating and implementing policies or
regulations that preempt State law or that have federalism
implications. The Executive Order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions.
24. The Commission has examined the NOPR and has determined that it
would not have 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. Therefore, the Commission has not prepared a federalism
assessment.
VI. Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use)
25. Executive Order 13211 (Actions Concerning Regulations that
Significantly Affect Energy Supply, Distribution, or Use) requires
Federal agencies to prepare and submit to OIRA at OMB, a Statement of
Energy Effects for any significant energy action. A ``significant
energy action'' is defined as any action that promulgates or is
expected to lead to promulgation of a final rule, and that: (1) is a
significant regulatory action under Executive Order 12866, or any
successor order and is likely to have a significant adverse effect on
the supply, distribution, or use of energy; or (2) is designated by the
Administrator of OIRA as a significant energy action. For any
significant energy action, the agency must give a detailed statement of
any adverse effects on energy supply, distribution, or use should the
proposal be implemented, and of reasonable alternatives to the
[[Page 52907]]
action and their expected benefits on energy supply, distribution, and
use.
26. At this NOPR stage, the Commission has preliminarily determined
that this rule would not have a significant adverse effect on the
supply, distribution, or use of energy. Accordingly, the Commission has
not prepared a Statement of Energy Effects.
VII. Environmental Analysis
27. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\45\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment. Included in this exclusion are proposed rules that are
clarifying, corrective, or procedural or that do not substantially
change the effect of the regulations being amended.\46\ The action
proposed herein falls within this categorical exclusion in the
Commission's regulations.
---------------------------------------------------------------------------
\45\ Reguls. Implementing the National Env't Pol'y Act, Order
No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. ] 30,783
(1987) (cross-referenced at 41 FERC ] 61,284).
\46\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------
VIII. Regulatory Flexibility Act
28. The Regulatory Flexibility Act of 1980 (RFA) \47\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
The Small Business Administration's (SBA) Office of Size Standards
develops the numerical definition of a small business.\48\ The SBA
defines a small oil pipeline company as one with less than 1,500
employees.\49\ Based on this definition, the Commission identified 43
small entities that the proposed rule will affect. As discussed above,
the burdens and costs associated with filing oil pipeline tariffs will
not change as a result of the proposed rule. The currently approved
hourly burden for submitting a tariff filing is 7 hours ($721). We view
this as a minimal economic impact for each entity. Accordingly, we
certify that the proposed rule will not have a significant economic
impact on a substantial number of small entities. Thus, no regulatory
flexibility analysis is required.
---------------------------------------------------------------------------
\47\ 5 U.S.C. 601-612.
\48\ 13 CFR 121.101.
\49\ Id. 121.201, Subsector 486 (Pipeline Transportation).
---------------------------------------------------------------------------
IX. Comment Procedures
29. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commenters may wish
to discuss. Initial Comments are due [insert date 30 days after date of
publication in the Federal Register], and Reply Comments are due
[insert date 51 days after date of publication in the Federal
Register]. Comments must refer to Docket No. RM26-6-000, and must
include the commenter's name, the organization they represent, if
applicable, and their address in their comments. All comments will be
placed in the Commission's public files and may be viewed, printed, or
downloaded remotely as described in the Document Availability section
below. Commenters on this proposal are not required to serve copies of
their comments on other commenters.
30. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's website at <a href="http://www.ferc.gov">http://www.ferc.gov</a>. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software must be filed in native applications or print-to-PDF format
and not in a scanned format. All supporting workpapers must be
submitted with links and formulas intact and in a spreadsheet format
acceptable under the Commission's eFiling rules. Commenters filing
electronically do not need to make a paper filing.
31. Commenters that are not able to file comments electronically
may file an original of their comment by USPS mail or by courier-or
other delivery services. For submission sent via USPS only, filings
should be mailed to: Federal Energy Regulatory Commission, Office of
the Secretary, 888 First Street NE, Washington, DC 20426. Submission of
filings other than by USPS should be delivered to: Federal Energy
Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
X. Document Availability
32. 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 (<a href="http://www.ferc.gov">http://www.ferc.gov</a>).
33. From the Commission's Home Page on the internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
34. User assistance is available for eLibrary and the Commission's
website during normal business hours from FERC Online Support at (202)
502-6652 (toll free at 1-866-208-3676) or email at
<a href="/cdn-cgi/l/email-protection#6c0a091e0f0302000502091f191c1c031e182c0a091e0f420b031a"><span class="__cf_email__" data-cfemail="e1878493828e8f8d888f84929491918e9395a187849382cf868e97">[email protected]</span></a>, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
<a href="/cdn-cgi/l/email-protection#621217000e0b014c1007040710070c0107100d0d0f22040710014c050d14"><span class="__cf_email__" data-cfemail="85f5f0e7e9ece6abf7e0e3e0f7e0ebe6e0f7eaeae8c5e3e0f7e6abe2eaf3">[email protected]</span></a>.
By direction of the Commission.
Issued: November 20, 2025.
Carlos D. Clay,
Deputy Secretary.
Appendix--Pipelines That Resubmitted Page 700 Data for 2019 Since April
2025
------------------------------------------------------------------------
Pipeline Filing date
------------------------------------------------------------------------
1. MPLX Ozark Pipe Line LLC........... April 17, 2025.
2. Tesoro Logistics Northwest Pipeline April 17, 2025.
LLC.
3. Marathon Pipe Line LLC............. April 17, 2025.
4. Muskegon Pipeline LLC.............. April 17, 2025.
5. Hardin Street Holdings LLC......... April 17, 2025.
6. Andeavor Gathering I LLC........... April 17, 2025.
7. Tesoro High Plains Pipeline Company April 17, 2025.
LLC.
8. Andeavor Logistics Rio Pipeline LLC April 17, 2025.
9. Western Refining Conan Gathering, April 17, 2025.
LLC.
10. Western Refining Pipeline, LLC.... April 17, 2025.
11. Ohio River Pipe Line LLC.......... April 17, 2025.
[[Page 52908]]
12. Dakota Access, LLC................ April 28, 2025.
13. White Cliffs Pipeline, L.L.C...... April 28, 2025.
14. Inland Corporation................ April 28, 2025.
15. Energy Transfer Crude Oil Company, April 28, 2025.
LLC.
16. Mid Valley Pipeline Company LLC... April 28, 2025.
17. Permian Express Terminal LLC...... April 28, 2025.
18. Permian Express Partners LLC...... April 28, 2025.
19. West Texas Gulf Pipe Line Company April 28, 2025.
LLC.
20. Bayou Bridge Pipeline LLC......... April 28, 2025.
21. Enable Bakken Crude Services, LLC. April 28, 2025.
22. Centurion Pipeline L.P............ April 29, 2025.
23. Sunoco Pipeline L.P............... April 29, 2025.
24. Centurion SENM Gathering LP....... April 29, 2025.
25. Energy Transfer GC NGL Pipelines April 29, 2025.
LP.
26. ETP Crude LLC..................... April 29, 2025.
27. Front Range Pipeline LLC.......... May 1, 2025.
28. NuStar Permian Transportation and May 1, 2025.
Storage, LLC.
29. CCPS Transportation, LLC.......... May 2, 2025.
30. Enbridge Storage (Patoka) L.L.C... May 2, 2025.
31. Enbridge Energy, Limited May 2, 2025.
Partnership.
32. Express Pipeline LLC.............. May 2, 2025.
33. Platte Pipe Line Company, LLC..... May 2, 2025.
34. Seminole Pipeline Company LLC..... May 2, 2025.
35. Illinois Extension Pipeline May 2, 2025.
Company L.L.C.
36. Gray Oak Pipeline, LLC............ May 2, 2025.
37. Enbridge Pipelines (Toledo) Inc... May 2, 2025.
38. North Dakota Pipeline Company LLC. May 2, 2025.
39. Enbridge Pipelines (Southern May 2, 2025.
Lights) LLC.
40. Bakken Pipeline Company LP........ May 2, 2025.
41. Enbridge Pipelines (FSP) L.L.C.... May 2, 2025.
42. Texas Express Pipeline LLC........ May 2, 2025.
43. Rio Grande Pipeline Company LLC... May 5, 2025.
44. Seaway Crude Pipeline Company LLC. May 5, 2025.
45. Enterprise TE Products Pipeline May 6, 2025.
Company LLC.
46. Enterprise Lou-Tex NGL Pipeline May 6, 2025.
L.P.
47. Baton Rouge Pipeline LLC.......... May 6, 2025.
48. Mid-America Pipeline Company, LLC. May 6, 2025.
49. Dixie Pipeline Company LLC........ May 6, 2025.
50. Sorrento Pipeline Company, LLC.... May 6, 2025.
51. WILPRISE Pipeline Company, L.L.C.. May 6, 2025.
52. Enterprise Interstate Crude LLC... May 6, 2025.
53. Panola Pipeline Company, LLC...... May 6, 2025.
54. Tri-States NGL Pipeline, LLC...... May 6, 2025.
55. Leveret Pipeline Company LLC...... May 6, 2025.
56. Buckeye Pipe Line Company, L.P.... June 16, 2025.
57. Buckeye Pipe Line Transportation June 16, 2025.
LLC.
58. Buckeye Linden Pipe Line Company June 16, 2025.
LLC.
59. Wood River Pipe Lines LLC......... June 16, 2025.
60. West Shore Pipe Line Company...... June 16, 2025.
61. Norco Pipe Line Company, LLC...... June 16, 2025.
------------------------------------------------------------------------
[FR Doc. 2025-20762 Filed 11-21-25; 8:45 am]
BILLING CODE 6717-01-P
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