[Federal Register Volume 83, Number 154 (Thursday, August 9, 2018)]
[Notices]
[Pages 39507-39508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17053]
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DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
[Docket No. PHMSA-2017-0129]
Pipeline Safety: Underground Natural Gas Storage Facility User
Fee
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.
ACTION: Notice of agency action.
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SUMMARY: On December 8, 2017, PHMSA published a notice and request for
comments in the Federal Register titled: ``Underground Natural Gas
Storage Facility User Fee'' seeking comments from underground natural
gas storage facility (UNGS) operators on a proposal to use UNGS annual
report data in the user fee rate structure. PHMSA received two comments
in the docket. We are publishing this notice to address the comments
received and to announce that PHMSA has used UNGS annual report data
about the number of wells in the user fee rate structure for the
Pipeline Safety Fund's Underground Natural Gas Storage Facility Safety
Account.
FOR FURTHER INFORMATION CONTACT: Crystal Stewart by telephone at 202-
366-1524, by fax at 202-366-4566, by email at [email protected],
or by mail at U.S. Department of Transportation, PHMSA, 1200 New Jersey
Avenue SE., PHP-2, Washington, DC 20590-0001.
SUPPLEMENTARY INFORMATION:
Background
The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA)
(Pub. L. 99-272, sec. 7005), codified in part at section 60301 of title
49, United States Code, authorizes the assessment and collection of
user fees to fund the pipeline safety activities conducted under
chapter 601 of title 49. On June 22, 2016, President Obama signed into
law the ``Protecting our Infrastructure of Pipelines and Enhancing
Safety Act of 2016'' (Pub. L. 114-183) (PIPES Act of 2016). Section 12
of the PIPES Act of 2016 mandates that PHMSA issue regulations for UNGS
facilities, authorizes user fees on operators of these facilities, and
directs PHMSA to prescribe procedures to collect those fees upon
appropriation. Section 2 of the PIPES Act of 2016 authorizes $8 million
per year to be appropriated from those fees for each of FY 2017-2019
for the newly established Underground Natural Gas Storage Facility
Safety Account in the Pipeline Safety Fund. After Congress appropriates
funds to this account for fiscal year (FY) 2018 and beyond, PHMSA will
collect user fees from the operators of the facilities.
Summary of Comments
The December 8, 2017 notice advised all UNGS facility operators of
a proposed PHMSA pipeline user fee assessment and rate structure (82 FR
58045). During the one-month response period, PHMSA received comments
from two commenters on the proposed UNGS user fee billing methodology:
WBI Energy Transmission Inc., and National Fuel Gas Supply Corporation.
The comments can be found at http://www.regulations.gov in Docket
Number PHMSA-2017-0129. WBI Energy Transmission Inc., submitted
comments supporting the rate structure proposed by PHMSA in the
December 8, 2017 notice. The remaining comment is summarized below with
PHMSA's response:
Comment: National Fuel Gas Supply Corporation stated that well
count alone is not an appropriate measure for determining a user fee
since larger wells will require more regulatory oversight than smaller
wells.
Response: Each well penetrating an underground natural gas storage
reservoir represents a risk. Currently, PHMSA intends to apply a
consistent level of regulatory oversight to all wells, regardless of
size. As PHMSA implements its underground storage inspection program,
we may gain insights leading to a user fee methodology more reflective
of regulatory oversight effort.
Underground Natural Gas Storage Facility User Fee Plan
During the FY 2018 user fee process, PHMSA has used calendar year
(CY) 2016 annual report data for gas transmission pipelines, hazardous
liquid pipelines, and liquefied natural gas facilities. Using CY 2016
data ensures adequate time to verify annual report data quality and
still be able to send user fee assessments promptly after
appropriation. PHMSA does not have CY 2016 annual report data for
underground natural gas storage facilities. Congress appropriated UNGS
funds for FY 2018, and PHMSA has
[[Page 39508]]
used the CY 2017 UNGS annual report data to develop the UNGS user fee
rate structure for FY 2018. If Congress appropriates UNGS funds for FY
2019, PHMSA plans to use the CY 2017 UNGS annual report data to develop
the UNGS user fee rate structure for FY 2019. Specifically, PHMSA will
use the number of injection/withdraw wells (section C7) and monitoring/
observation wells (section C8) in the rate structure. For the FY 2020
user fee rate structure, PHMSA would use the CY 2018 UNGS annual report
data.
For FY 2018, Congress has appropriated $8 million to the
Underground Natural Gas Storage Facility Safety Account in the Pipeline
Safety Fund. PHMSA has used the following steps to develop the user fee
rate structure. PHMSA summed the number of wells from sections C7 and
C8 of the annual report for each operator. Once PHMSA determined the
number of wells for all UNGS operators, each operator was parsed into
one of 10 tiers, based on an ordinal ranking of its well counts
compared to other UNGS operators. The operators with the lowest well-
count values were placed in tier 1, with the highest operator well-
count values in tier 10. The minimum and maximum well counts for each
tier were then selected so that an equal number of operators were
placed in each tier. This tiered fee structure is designed to place a
larger share of the user fee on operators with higher well counts.
Using CY 2017 UNGS annual report data as of May 9, 2018, the
following table shows the tier boundaries and user fee for each
operator in the tier. When the tier boundary spans two tiers, PHMSA
randomly selected operators for the lower tier. For example, four wells
is the boundary between Tiers 1 and 2. Seven operators have four wells,
but only two operators were randomly selected and placed in Tier 1. The
remaining five operators with four wells were placed in Tier 2.
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Number of User fee per
Tier Amount (% of total) Tier boundaries operators operator
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1................................. $160,000 (2%)........ 4 wells or less...... 13 $12,308
2................................. $320,000 (4%)........ 4 to 7 wells......... 13 24,615
3................................. $400,000 (5%)........ 7 to 12 wells........ 13 30,769
4................................. $480,000 (6%)........ 13 to 19 wells....... 13 36,923
5................................. $640,000 (8%)........ 19 to 27 wells....... 13 49,231
6................................. $800,000 (10%)....... 28 to 45 wells....... 13 61,538
7................................. $960,000 (12%)....... 46 to 68 wells....... 13 73,846
8................................. $1,040,000 (13%)..... 69 to 100 wells...... 12 86,667
9................................. $1,200,000 (15%)..... 101 to 377 wells..... 12 100,000
10................................ $2,000,000 (25%)..... 378 wells or more.... 12 166,667
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In summary, PHMSA has used UNGS annual report data about the number
of wells in the FY 2018 user fee rate structure for the Pipeline Safety
Fund's Underground Natural Gas Storage Facility Safety Account. In
future years, the final tier boundaries and user fee per operator may
differ slightly from those listed above based on the annual report data
at the time the rate structure is established.
Issued in Washington, DC, on August 3, 2018, under authority
delegated in 49 CFR 1.97.
Alan K. Mayberry,
Associate Administrator for Pipeline Safety.
[FR Doc. 2018-17053 Filed 8-8-18; 8:45 am]
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