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Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Rules and Regulations
the prior five years, regulatory changes and other developments occurring after the 20142019 period concluded on December 31, 2019, are beyond the scope of this index review.130 To the extent that such developments affect barrel-mile costs going forward, the Commission will incorporate those cost changes as reflected in page 700 cost-ofservice data in future index calculations.
G. Treatment of Mergers in the Data Set
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1. Comments 59. To account for mergers that occurred during the study period, the Kahn Methodology adds the separate costs the pipelines reported on Form No. 6 in the first year of the data set e.g., 2014 and compares this sum to the newly combined companys costs in the last year of the data set e.g., 2019.131 The Commission employs a similar process for addressing divestitures, adding the separate costs that the pipelines reported on Form No.
6 in the last year of the data set and comparing this sum to the previously combined companys costs in the first year of the data set. Joint Commenters and AOPL each propose to adjust the data set to account for merger activity that they claim occurred during the 20142019 period but was not reflected in the data underlying the Commissions proposal in the NOI.
60. Joint Commenters propose to account for six additional mergers: 1
Plains Southcap Inc. and Plains Pipeline, LP; 2 Red River Crude Pipeline LLC and Enterprise Crude Pipeline LLC; 3 Regency Liquids Pipeline LLC and Lone Start NGL
Pipeline LP; 4 Independent Trading &
Transportation Company I, L.L.C. and Hiland Crude, LLC; 5 Phillips 66
Pipeline LLC and Phillips 66 Carrier LLC; and 6 Excel Pipeline LLC and Sunoco Pipeline L.P.132 AOPL proposes to reflect the Excel-Sunoco merger and two additional mergers: i Mid-Valley Pipeline Company and Energy Transfer Crude Oil Company LLC Energy Transfer Crude; and ii The Premcor Pipeline Co. and Valero Partners Lucas, LLC Valero Lucas.133 Joint 130 Cost changes incurred during the 20192024
period as a result of integrity management and other regulatory obligations will be addressed in the 2025
index review.
131 2015 Index Review, 153 FERC 61,312 at P
38. The Commission has explained that without this step, the absorbed pipelines cost data would be needlessly discarded. Id.
132 Joint Commenters Reply Comments, Brattle Group Report, Attachment D at 2, 47 Data Merger Analysis.
133 Shehadeh Initial Decl., Ex. A1 Companies Consolidated to Adjust for Mergers, Acquisitions, and Changes in Corporate Form 20142019.

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Commenters disagree with AOPLs proposals to reflect mergers between Mid-Valley-Energy Transfer Crude and Premcor-Valero Lucas.134
2. Commission Determination 61. We will adjust the data set to reflect mergers between: 1 Plains Southcap Inc. and Plains Pipeline, LP;
2 Red River Crude Pipeline LLC and Enterprise Crude Pipeline LLC; 3
Regency Liquids Pipeline LLC and Lone Star NGL Pipeline LP; 4 Independent Trading & Transportation Company I, L.L.C. and Hiland Crude, LLC; 5
Phillips 66 Pipeline LLC and Phillips 66
Carrier LLC; and 6 Excel Pipeline LLC
and Sunoco Pipeline L.P.135 We have verified through a review of Form No.
6 data that these mergers took place during the 20142019 period and will therefore revise the data set to combine these pipelines costs in 2019 as appropriate.
62. We decline, however, to adopt AOPLs proposal to reflect mergers between Mid-Valley-Energy Transfer Crude and Premcor-Valero Lucas. We find that the record does not support adjusting the Form No. 6 data to reflect these mergers. For instance, a review of the total miles owned at year end does not indicate that any transfer of assets took place between these companies during the review period.136 The Commissions review of other Form No.
6 data likewise did not confirm whether these mergers in fact took place.137
IV. 20212026 Oil Pipeline Index 63. Based upon the foregoing, we calculate the index level used to determine annual changes to oil pipeline rate ceilings for the five-year period beginning July 1, 2021 as follows. First, as shown in Attachment A Exhibit 2 we remove those pipelines that did not provide Form No. 6, page 700 data or provided incomplete data.
Second, as shown in Attachment A
Exhibit 5, we consider the data on Form No. 6, page 700 to calculate each pipelines cost change on a per barrelmile basis over the prior five-year period e.g., the years 20142019 in this proceeding. Third, to remove statistical outliers and spurious or unrepresentative data, we trim the data set to those pipelines in the middle 80%
134 Joint Commenters Reply Comments, Brattle Group Report at 4850.
135 The Commission identified the Excel Pipeline LLC-Sunoco Pipeline L.P. merger in the NOI
proposal but did not combine their data for 2019.
136 Joint Commenters Reply Comments, Brattle Report at 4950.
137 For example, despite its alleged merger with Energy Transfer Partners, Mid-Valley continued filing Form No. 6 in its own name for each year of the review period through 2019.

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of cost changes. Fourth, as shown in Attachment A Exhibit 5, we calculate three measures of the middle 80%s central tendency: The median, the mean, and a weighted mean. Fifth, we calculate a composite by taking a simple average of those three measures of central tendency, as shown in Attachment A Exhibit 1. Finally, we compare this composite to the value of the PPIFG index data over the same period 0.52% in this proceeding and set the index level at PPIFG plus or minus this differential. Using these calculations, we establish an index level of PPIFG+0.78% for the five-year period beginning July 1, 2021.
The Commission Orders Consistent with the discussion in this order, the Commission determines that the appropriate oil pipeline index level for the next five years, July 1, 2021
through June 30, 2026, is PPI
FG+0.78%.
By the Commission. Commissioner Glick is dissenting with a separate statement attached. Commissioner Clements is not participating.
Issued: December 17, 2020.
Kimberly D. Bose, Secretary.

Federal Energy Regulatory Commission Five-Year Review of Oil Pipeline Index Glick, Commissioner, Dissenting 1. Todays order is a complete abdication of the Commissions responsibility to protect oil pipeline customers. It overthrows wellestablished Commission policy and goes back on explicit promises we made to customers just a few years ago. As a result, the Commission is handing oil pipelines a multi-billion-dollar windfall for which customers are left to pick up the tab. I dissent strongly from those unreasoned and indefensible determinations.

2. A little background is necessary to appreciate just how seriously the Commission has fallen down on the job.
In the Energy Policy Act of 1992, Congress directed the Commission to promulgate a rule to simplify its ratemaking methodology for oil pipelines.1 Shortly thereafter, the Commission issued Order No. 561, which adopted an indexing methodology as part of the Commissions approach for regulating 1 Energy Policy Act of 1992, Public Law 102486, 1801a Oct. 24, 1992 codified at 42 U.S.C. 7172
note 2006.

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