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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Rules and Regulations
Statement 3 and precedent 4 concerning tax allowances to address the double recovery issue identified by United Airlines, Inc. v. FERC.5 These procedures also allowed interstate natural gas pipelines to voluntarily reduce their rates. On April 18, 2019, the Commission denied all outstanding requests for rehearing and reaffirmed the Commissions determinations in Order No. 849 Order No. 849A.6
2. Order No. 849 established a requirement, pursuant to sections 10
and 14a of the Natural Gas Act NGA,7
that all interstate natural gas companies with cost-based stated rates that filed a 2017 FERC Form No. 2 or 2A must file the FERC Form No. 501G informational filing for the purpose of evaluating the impact of the Tax Cuts and Jobs Act and the United Airlines Issuances on interstate natural gas pipelines revenue requirements. In addition to the FERC
Form No. 501G filing requirement, the Commission provided four options for each interstate natural gas pipeline to make a filing to address the changes to the pipelines recovery of tax costs or explain why no action is needed: 1 A
limited NGA section 4 8 rate reduction filing Option 1, 2 a commitment to file a general section 4 rate case or prepackaged settlement in the near future Option 2, 3 an explanation why no rate change is needed Option 3, and 4 no action Option 4. These procedures were intended to encourage natural gas pipelines to voluntarily reduce their rates to the extent the tax changes result in their over-recovering their cost of service, while also providing the Commission and stakeholders information necessary to take targeted actions under NGA section 5 9 where necessary to achieve just and reasonable rates.
3. Order No. 849 made three changes to the Code of Federal Regulations.
First, new 260.402 of the Commissions regulations established the FERC Form No. 501G filing
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3 Inquiry
Regarding the Commissions Policy for Recovery of Income Tax Costs, 81 FR 94366 Dec.
23, 2016, 162 FERC 61,227 Revised Policy Statement, order on rehg, 83 FR 12362 March 21, 2018, 164 FERC 61,030 2018 Revised Policy Statement Rehearing.
4 SFPP, L.P., Opinion No. 511C, 162 FERC
61,228, at P 9 2018.
5 827 F.3d 122 D.C. Cir. 2016 United Airlines.
For purposes of this order, the Revised Policy Statement, United Airlines, and Opinion No. 511
C will collectively be referred to as United Airlines Issuances.
6 Interstate & Intrastate Nat. Gas Pipelines; Rate Changes Relating to Fed. Income Tax Rate, Order No. 849A, 84 FR 17739 April 26, 2019, 167 FERC
61,051 2019.
7 15 U.S.C. 717ia, 717ma.
8 15 U.S.C. 717c.
9 15 U.S.C. 717d.

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requirement described above.10 Second, new 154.404 of the Commissions regulations established the regulations necessary to govern Option 1, the limited NGA section 4 rate reduction filings.11 Options 2, 3, and 4 above did not require any change in regulations, as they could proceed under preexisting regulatory authority. Third, new 284.123i of the Commissions regulations provided procedures for section 311 of the National Gas Policy Act of 1978 NGPA 12 and Hinshaw 13
pipelines to establish fair and equitable rates for their interstate services.14
II. Discussion 4. In Order No. 849, the Commission identified 129 interstate natural gas pipelines with cost-based rates that were required to file the FERC Form No.
501G, codified in 260.402. As of the date of Order No. 849A, the Commission had received filings from all 129 identified pipelines.15 As of April 15, 2021, all of these FERC Form No. 501G filings have been accepted for filing, and the proceedings terminated. Because Order No. 849
established a one-time reporting requirement tied to a past event, it would not apply to any new pipelines that may enter the market in the future.
Therefore, the regulations implemented in Order No. 849 are no longer needed, and we hereby remove 260.402 from the Commissions regulations.
5. Eleven pipelines chose Option 1, codified in 154.404. Under Option 1, pipelines could only choose to make these limited NGA section 4 rate reduction filings at the time of their FERC Form No. 501G filings. Just as no new FERC Form No. 501G filings are possible, likewise no new filings under 154.404 are possible.
6. For any of these limited NGA
section 4 rate reduction filings that proceeded to hearing, 154.404 also governs the process by which these hearings are adjudicated, so it would not have been reasonable to remove 154.404 before all the existing hearings concluded, either with the acceptance of a settlement or with the publication of an Initial Decision. There are no remaining dockets that are either in an 10 18

CFR 260.402.
CFR 154.404.
12 15 U.S.C. 3371.
13 Section 1c of the NGA, 15 U.S.C. 717c, exempts from the Commissions NGA jurisdiction those pipelines which transport gas in interstate commerce if: 1 They receive natural gas at or within the boundary of a state, 2 all the gas is consumed within that state, and 3 the pipeline is regulated by a state Commission. This is known as the Hinshaw exemption.
14 18 CFR 284.123i.
15 Order No. 849A, 167 FERC 61,051 at P 4.
11 18

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Option 1 hearing or eligible to be set for an Option 1 hearing. As a result, the regulations governing this type of limited NGA section 4 rate reduction filings are no longer needed. We shall therefore remove 154.404 of the Commissions regulations.
7. Order No. 849 also established separate regulations under 284.123i to address the unique jurisdictional situation of section 311 and Hinshaw pipelines, which have their interstate rates regulated by the Commission, but which are primarily regulated at the state level. Under pre-existing policy, the Commission reviews the rates of section 311 and Hinshaw pipelines every five years on a rolling basis.16
Section 284.123i, in brief, provided a mechanism to lower these pipelines interstate rates prior to their five-year review, in the event that state government regulators also adjusted their rates in light of the recent changes in tax code and tax policy. In the threeand-a-half years from the passage of the Tax Cuts and Jobs Act in November 2017 until the present, almost all section 311 and Hinshaw pipelines have either come before the Commission for their five-year review, or have come before the Commission for an out-ofcycle rate review, whether due to 284.123i, voluntary action, or the other requirements of section 284 of the Commissions regulations that can compel an out-of-cycle rate review. The Commission, through its own review, finds it is unlikely that the remaining section 311 and Hinshaw pipelines will trigger 284.123i, and in any event all are due for their five-year review in the near future under the Commissions preexisting policy. As a result, the special circumstances presented by the Tax Cuts and Jobs Act that required 284.123i are no longer present. We shall therefore remove 284.123i of the Commissions regulations.
III. Regulatory Requirements A. Information Collection Statement 8. The Paperwork Reduction Act 17
requires each Federal agency to seek and obtain the Office of Management and Budgets OMB approval before undertaking a collection of information including reporting, record keeping, and public disclosure requirements 16 Contract Reporting Requirements of Intrastate Nat. Gas Cos., Order No. 735, 75 FR 29404 May 26, 2010, 131 FERC 61,150, at P 96, order on rehg, Order No. 735A, 75 FR 80685 Dec. 23, 2010, 133 FERC 61,216 2010; see also Hattiesburg Indus. Gas Sales, L.L.C., 134 FERC
61,236 2011 imposing a five-year rate review requirement on Hattiesburg Industrial Gas Sales, L.L.C..
17 44 U.S.C. 35013521.

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