[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 243-256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Parts 161 and 250
[Docket Nos. RM87-5-012 and CP87-238-003; Order No. 497-E]
Inquiry Into Alleged Anticompetitive Practices Related to
Marketing Affiliates of Interstate Pipelines and Ozark Gas Transmission
System; Order on Rehearing and Extending Sunset Date
Issued December 23, 1993.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule; order on rehearing and extending sunset date.
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SUMMARY: This order rules on requests for rehearing of the Commission's
order on remand issued following the decision of the U.S. Court of
Appeals for the D.C. Circuit which upheld in substantial part the
Commission's final rule governing the relationship between interstate
natural gas pipelines and their marketing or brokering affiliates. The
order on remand, among other things, narrowed the scope of the
contemporaneous disclosure requirement by pipelines with respect to
sales and marketing information and extended the sunset date of the
final rule's reporting requirements. The order on rehearing, among
other things, deletes the remaining categories of gas sales and
marketing information from the contemporaneous disclosure requirement
and further extends the sunset date.
EFFECTIVE DATE: This final rule is effective January 1, 1994.
FOR FURTHER INFORMATION CONTACT: David Faerberg, Office of the General
Counsel, Federal Energy Regulatory Commission, 825 North Capitol
Street, NE., Washington, DC 20426, (202) 208-1275.
SUPPLEMENTARY INFORMATION: In addition to publishing the full text of
this document in the Federal Register, the Commission also provides all
interested persons an opportunity to inspect or copy the contents of
this document during normal business hours in room 3104, 941 North
Capitol Street, NE., Washington, DC 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user and may be accessed using a personal computer with a modem by
dialing (202) 208-1397. To access CIPS, set your communications
software to use 300, 1200, or 2400 bps, full duplex, no parity, 8 data
bits and 1 stop bit. CIPS can also be accessed at 9600 bps by dialing
(202) 208-1781. The full text of this rule will be available on CIPS
for 30 days from the date of issuance. The complete text on diskette in
WordPerfect format may also be purchased from the Commission's copy
contractor, La Dorn Systems Corporation, also located in room 3104, 941
North Capitol Street, NE., Washington, DC 20426.
I. Introduction
On December 4, 1992, the Commission issued Order No. 497-D1 in
response to the opinion issued by the United States Court of Appeals
for the District of Columbia Circuit in Tenneco Gas v. Federal Energy
Regulatory Commission (Tenneco)2 which upheld in substantial part
Order Nos. 497 and 497-A,3 the Commission's final rule governing
the relationship between interstate natural gas pipelines and their
marketing or brokering affiliates. However, the court found that the
Commission did not adequately justify its extension of the
contemporaneous disclosure requirement of Sec. 161.3(f)4 of the
Commission's regulations to gas sales and marketing information.
Further, in its review of Ozark Gas Transmission System (Ozark),5
a consolidated case, the court found that, based upon the evidence in
the record, the Commission erred in finding Order No. 497 applicable to
Ozark Gas Transmission System (Ozark), a joint venture. Accordingly,
the court remanded the proceeding to the Commission. In response to the
court's remand, the Commission issued Order No. 497-D which revised
Sec. 161.3(f) to narrow the scope of the contemporaneous disclosure
requirement with respect to sales and marketing information, and found
that Ozark is subject to the requirements of Order No. 497. In
addition, Order No. 497-D extended the sunset date of Order No. 497's
reporting requirements from December 31, 1992, until December 31, 1993.
However, the order stated that 90 days after the Commission has
determined that an individual pipeline is in full compliance with Order
No. 636,6 the pipeline would not be required to submit the
affiliated transportation log (FERC Form No. 592) to the Commission.
The order stated that the pipeline must continue to maintain and
provide its affiliated transportation log information on its electronic
bulletin board (EBB).
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\1\57 FR 58978 (December 14, 1992), III FERC Stats. & Regs.
30,958 (1992).
\2\969 F.2d 1187 (D.C. Cir. 1992).
\3\Inquiry Into Alleged Anticompetitive Practices Related to
Marketing Affiliates of Interstate Pipelines, Order No. 497, 53 FR
22139 (June 14, 1988), FERC Stats. & Regs. [Regulations Preambles
1986-1990] 30,820 (1988), order on rehearing, Order No. 497-A, 54
FR 52781 (December 22, 1989), FERC Stats. & Regs. [Regulations
Preambles 1986-1990] 30,868 (1989), order extending sunset date,
Order No. 497-B, 55 FR 53291 (December 28, 1990), FERC Stats. &
Regs. [Regulations Preambles 1986-1990] 30,908 (1990), order
extending sunset date and amending final rule, Order No. 497-C, 57
FR 9 (January 2, 1992), III FERC Stats. & Regs 30,934 (1991),
reh'g denied, 57 FR 5815, 58 FERC 61,139 (1992), aff'd in part and
remanded in part, Tenneco Gas v. Federal Energy Regulatory
Commission, 969 F.2d 1187 (D.C. Cir. 1992).
\4\18 CFR 161.3(f).
\5\49 FERC 61,247 (1989).
\6\Pipeline Service Obligations and Revisions to Regulations
Governing Self-Implementing Transportation; and Regulation of
Natural Gas Pipelines After Partial Wellhead Decontrol, 57 FR 13267
(April 16, 1992), III FERC Stats. & Regs. Preambles 30,939 (April
8, 1992), order on reh'g, Order No. 636-A, 57 FR 36128 (August 12,
1992), III FERC Stats. & Regs. Preambles 30,950 (August 3, 1992);
order on reh'g, Order No. 636-B, 57 FR 57911 (December 8, 1992), 61
FERC 61,272 (1992), reh'g denied, 62 FERC 61,007 (January 8,
1993).
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This order (1) deletes the remaining categories of gas sales and
marketing information from the contemporaneous disclosure requirement,
(2) affirms the Commission's decision to eliminate the filing of Form
592, (3) affirms the Commission's decision that Ozark is subject to
Order No. 497, (4) rejects Hadson Gas Systems, Inc.'s (Hadson) argument
that the Commission's procedures for acting on Secs. 161.3(j) and
284.286(e) filings prohibit public participation, (5) requires all
future standards of conduct filings made under section 161.3(j) and all
requests for waiver of the standards to include form notices, suitable
for publishing in the Federal Register, (6) clarifies what type of
employee is an ``operating employee'' for purposes of the Order No. 497
regulations, and (7) extends the sunset date of Order No. 497's
reporting requirements until June 30, 1994, because concurrently with
this order the Commission is issuing a notice of proposed rulemaking
(NOPR) in Docket No. RM94-6-000 which proposes to revise Order No.
497's reporting requirements.
II. Public Reporting Burden
The public reporting burden under FERC-592, Marketing Affiliates of
Interstate Pipelines, as revised by Order Nos. 497-D and 636, is
expected to remain unchanged. Currently, the reporting burden is
estimated to average 9.94 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Annual reporting requirements under FERC-592
are expected to total 7,882 hours, based on an estimated 793 responses
from approximately 61 respondents.
Issued concurrently with this order is a NOPR in Docket No. RM94-6-
000.7 The NOPR proposes to significantly reduce the FERC-592
information reporting requirements and burden. Extending the sunset
date for FERC-592 through June 30, 1994, will give interested parties
and the Commission time to evaluate the NOPR comments and allow the
Commission time to prepare a final rule.
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\7\Standards of Conduct and Reporting Requirements for
Transportation and Affiliate Transactions.
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Interested persons may send comments regarding the burden estimates
or any other aspect of this information collection, including
suggestions for reductions to the reporting burden, to the Federal
Energy Regulatory Commission, 941 North Capitol Street, NE.,
Washington, DC 20426 [Attention: Michael Miller, Information Services
Division, (202) 208-1415, FAX (202) 208-2425]. Comments on these
reporting requirements may also be sent to the Office of Information
and Regulatory Affairs of OMB, Washington, D.C. 20503 [Attention: Desk
Officer for Federal Energy Regulatory Commission (202) 395-6880].
Hard copy and/or electronic formats for any data collection
required by this order may be obtained by contacting: La Dorn Systems
Corporation, room 3308, 941 North Capitol Street, NE., Washington, DC
20426.
III. Background
On July 21, 1992, the United States Court of Appeals for the
District of Columbia Circuit issued its opinion in Tenneco, upholding
in substantial part Order Nos. 497 and 497-A. However, the court found
that the Commission did not adequately justify its extension of the
contemporaneous disclosure requirement of Sec. 161.3(f) to gas sales
and marketing information. The court stated that ``[o]n remand the
Commission should reconsider its justification for applying [the
contemporaneous disclosure requirement of Sec. 161.3(f)] to sales and
marketing information and ensure that the final requirement is
reasonably tailored to meet the Commission's goals of improving the
market and benefitting consumers, as well as preventing undue
discrimination.'' 8 In a related matter, the court stated that
``[a]pplying [the contemporaneous disclosure requirement of
Sec. 161.3(f)] to released-gas information prior to the issuance of
Order No. 497-A might well be fundamentally unfair'' and that the
Commission could avoid ``the expense of litigation over this issue by
announcing that it will not retroactively apply [Sec. 161.3(f)] to
released gas information.''9 Further, in its review of Ozark, the
court found that the Commission erred in finding Order No. 497
applicable to Ozark, a joint venture partnership composed of
subsidiaries of four natural gas pipelines, each of which has a 25
percent ownership and voting interest. The court stated that the
Commission failed to consider relevant evidence regarding the ability
of the owner pipelines with affiliates to control the partnership.
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\8\Tenneco Gas v. Federal Energy Regulatory Commission, 969 F.2d
1187, 1201 (DC Cir. 1992).
\9\Id. at 1202.
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On December 4, 1992, in response to the court's opinion in Tenneco,
the Commission issued Order No. 497-D, an order on remand and extending
sunset date. Based upon the court's opinion, and in light of the
structural changes in the gas industry that were to occur as a result
of Order No. 636, the Commission revised Sec. 161.3(f) to narrow the
scope of the contemporaneous disclosure requirement with respect to
sales and marketing information. Under revised standard (f), pipelines
are still required to contemporaneously disclose information related to
transportation of natural gas. However, with respect to information
related to gas sales or marketing, pipelines are only required to
disclose information relating to sales or marketing on its system or
the system of an affiliated pipeline. There are two categories of gas
sales or marketing information that are not required to be
contemporaneously disclosed: (1) Gas sales or marketing information
that is available from public sources and (2) information related to
gas sales off a pipeline's system, but not involving the system of an
affiliated pipeline. Section 161.3(f) now reads:
To the extent [a pipeline] provides to a marketing affiliate
information related to transportation of natural gas, or information
related to gas sales or gas marketing on its system or the system of
an affiliated pipeline, it must provide that information
contemporaneously to all potential shippers, affiliated and
nonaffiliated, on its system. Pipelines are not required to
contemporaneously disclose: (1) Gas sales or gas marketing
information that is available from public sources and (2)
Information related to gas sales or gas marketing off a pipeline's
system, but not involving the system of an affiliated pipeline.
In a related matter, based upon the court's advice, the Commission
stated that it will not retroactively apply the contemporaneous
disclosure requirement of standard (f) to released gas information,
that is, standard (f)'s application to released gas information would
begin with the issuance of Order No. 497-A.
With respect to the issue of Order No. 497's applicability to
Ozark, the Commission found that despite the fact that there is a
unanimous approval provision in the Ozark partnership agreement, the
two partners that have parent companies with marketing affiliates
shipping on Ozark's line can still exercise ``control'' as defined by
Sec. 161.2 of the Commission's regulations.10 The Commission found
that even with a unanimous approval provision in the partnership
agreement, Ozark Pipeline Company and Tennessee Ozark Gas Company, the
two partners whose parent companies have marketing affiliates, can each
act alone to direct or effect the management or policies of Ozark Gas
Transmission System. The Commission stated that since there is a
unanimous approval requirement, each partner has veto power over any
decision by simply withholding its vote. The Commission stated that
such power could be exercised in a manner that could unduly prefer the
marketing affiliates related to Ozark's partners, for example, by
either or both partners refusing to engage in an action that would
benefit an independent marketer in competition with one of Ozark's
partners' affiliates. The Commission stated that it believed that
control can be exercised in a negative manner, i.e., by withholding
approval of a specific policy or transaction, as well as in an
affirmative manner, i.e., by actually approving a decision that would
unduly prefer a marketing affiliate.
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\1\018 CFR 161.2.
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Finally, the Commission extended the sunset date of Order No. 497's
reporting requirements from December 31, 1992, until December 31, 1993,
because of the important role they will play in the regulatory
structure created by Order No. 636. The Commission stated that although
Order No. 636 does not change the requirements governing the
relationship between pipelines and their marketing affiliates, the
structural changes engendered by full compliance with the rule would
remove the need to continue filing the affiliated transportation log
(FERC Form No. 592) with the Commission. The Commission stated that
Order No. 636's Electronic Bulletin Board (EBB) requirements ensure
certain minimum standards for maintaining and communicating information
about a pipeline's available capacity, current capacity release offers,
and affiliate marketing-related information. The order stated that
unless further case-specific action is taken by the Commission, 90 days
after the Commission has determined that a pipeline is in full
compliance with the requirements of Order No. 636, that pipeline will
not be required to submit Form 592 to the Commission. The order further
stated that the pipeline must continue to maintain and to provide its
affiliated transportation log information on its EBB. Finally, the
order stated, in practice, this means that pipelines remain subject to
the standards of conduct and will continue to maintain the information
mandated by Order Nos. 497 and 636, but will not be required to file
Form 592 with the Commission.
On January 4, 1993, requests for rehearing were filed by the
Indicated Parties (consisting of Conoco, Inc., Anadarko Petroleum
Corp., Chevron U.S.A., Inc., and Texaco Inc.), Hadson Gas Systems, Inc.
(Hadson), National Fuel Gas Supply Corporation (National Fuel), the
Interstate Natural Gas Association of America (INGAA), ANR Pipeline
Company and Colorado Interstate Gas Company (ANR and CIG), the Joint
Parties (consisting of Williams Gas Marketing Company, Consolidated
Natural Gas Company, Midcon Marketing Corp., and Enron Gas Marketing,
Inc.), CNG Transmission Corporation (CNG), Northwest Pipeline
Corporation (Northwest), and Ozark Gas Transmission System (Ozark).
Their requests are discussed below.
IV. Discussion
A. The Revised Contemporaneous Disclosure Requirement
1. Requests for Rehearing
A number of pipelines (National Fuel, INGAA, ANR, CIG, Tenneco,
CNG, and Northwest) and the Joint Parties assert that the Commission
should eliminate from Sec. 161.3(f) the requirement that sales and
marketing information given to a marketing affiliate must be
contemporaneously disclosed to all potential shippers because it is
inconsistent with the court's decision in Tenneco.
The pipelines and the Joint Parties contend that the revised
standard provides a limited exclusion for sales and marketing
information that is available from public sources or is related to off-
system sales or marketing transactions not involving the system of an
affiliated pipeline but there is no explanation in Order No. 497-D as
to how so limited an exclusion can be interpreted as responsive to the
court's remand. The pipelines and Joint Parties argue that the
Commission's assumption that pipelines obtain sales and marketing
information in connection with or when combined with transportation is
not responsive to the court's directive to provide an independent
justification for barring the exchange of sales or marketing
information that is wholly unrelated to transportation information. The
pipelines and the Joint Parties submit that Order No. 497-D evidences
neither the independent justification required by the court, nor a
consideration of the action on remand which was suggested by the court.
The pipelines and the Joint Parties assert that the Commission has not
examined the relevant data and articulated a satisfactory explanation
for its action including a rational connection between the facts found
and the choice made. They argue that the result is an arbitrary and
capricious order which is unsupported by substantial evidence.
The pipelines and the Joint Parties contend that Order No. 497-D is
inconsistent with Order No. 636. They assert that the Commission has
unequivocally found in Order No. 636 that sales services are
competitive and has set in motion a restructuring of the pipeline
industry that is intended to result in competition for sales on an even
basis by producers, pipelines, and marketers. The pipelines and the
Joint Parties submit that Order No. 497-D is at odds with Order No. 636
in its assumption (which is unsupported by record evidence) that
pipelines possess sales and marketing information which flows from the
pipelines' anticompetitive market power. They state that, as the
Commission documented in Order No. 636, most pipeline industry market
power has already been eliminated, and some individual companies have
completed the transition to competitiveness by unbundling. They further
state that to remove the last vestiges of pipeline market power, as the
Commission sees it in Order No. 636, an industry-wide unbundling is to
be in place by the start of the 1993-94 heating season.
The pipelines and the Joint Parties assert that in light of
unbundling under Order No. 636, it is inexplicable how the Commission
could see a need to re-promulgate standard (f) with regard to sales and
marketing information. They state that when Order No. 497 was issued,
prior to unbundling, the Commission's intent was to prevent
preferential treatment of an affiliated marketer by an interstate
pipeline in the provision of transportation services. The pipelines and
the Joint Parties state that, as recognized by the Commission,
pipelines have no monopoly power over sales. They assert that it is
only a pipeline's transportation function which even arguably puts it
in a position of being able to favor its own marketing affiliates.
Consequently, they argue that the standards of conduct under Order No.
497 should only apply to pipeline transportation information.
The pipelines and the Joint Parties contend that the new
contemporaneous disclosure requirement in Order No. 497-D imposes
unnecessary and unreasonable burdens upon pipelines. They state that,
as Chair Moler noted in her dissent to Order No. 497-D, the standards
of conduct under Order No. 497 already preclude pipelines from
disclosing to marketing affiliates any information obtained from non-
affiliated shippers, or otherwise giving any advantages or preferences
to their marketing affiliates in the provision of transportation
service. The pipelines and the Joint Parties assert that these
requirements effectively prevent pipelines from using any remaining
market power they have over transportation services to benefit their
marketing affiliates, and make the Order No. 497-D disclosure
requirements unnecessary. The pipelines and the Joint Parties do not
believe that in light of all of the current competition in the natural
gas industry, pipelines have significant market power over
transportation service. However, to the extent there is any remaining
market power over transportation service, the pipelines and the Joint
Parties argue that the Order No. 497 standards of conduct adequately
address this issue without a need for the contemporaneous disclosure
requirement for sales and marketing information. They submit that the
Commission's imposition of the Order No. 497-D contemporaneous
disclosure requirement only serves to benefit pipeline competitors, and
imposes unnecessary burdens on pipelines.
The pipelines and the Joint Parties argue that the Commission cites
no evidence to support its critical conclusion that the sales and
marketing information that a pipeline derives from its ongoing
relationship with its customers is a product of either past or present
anticompetitive market power. They assert that the Commission's error
on this point is exacerbated by its lack of jurisdiction to regulate
the disclosure of sales or marketing information at all. The pipelines
and Joint Parties state, as the court noted, because the Commission is
authorized to regulate only those practices that are unduly
discriminatory or preferential, the Commission appears to lack the
authority to prevent pipelines from preferring their affiliates with
exclusive access to sales or marketing information unless that sort of
preference is undue. The pipelines and Joint Parties contend that the
Commission cannot resolve questions about the very existence of its
authority based on nothing more than its sense that the informational
advantages that a gas marketer derives from an affiliated pipeline
result from anticompetitive market power rather than the economic
efficiencies of vertical integration. The pipelines and the Joint
Parties submit that the contemporaneous disclosure requirement also
exceeds the Commission's lawful authority because the Commission is
only empowered to act with respect to any transportation or sale of
natural gas subject to the jurisdiction of the Commission. They state
that the contemporaneous disclosure requirement apparently applies to
the sharing of information regardless of whether a jurisdictional
service is being performed. The pipelines and the Joint Parties assert
that there is plainly no lawful basis for the Commission to extend its
regulation to non-jurisdictional services.
The pipelines and the Joint Parties argue that even assuming that
the pipeline generates certain sales and marketing information that is
not publicly available, mere sharing of this information with an
affiliate does not translate into a transportation advantage for an
affiliate, i.e., even if the pipeline informs an affiliate of a
potential sales market, that does not mean that the pipeline can
automatically provide the affiliate with the transportation capacity
necessary to complete the deal. Indeed, they assert that the affording
of such a preference is precluded under Sec. 161.3(c) which states that
a pipeline may not give its marketing affiliate preference over
nonaffiliated customers in matters relating to part 284 transportation,
including, but not limited to, scheduling, balancing, transportation,
storage, or curtailment priority. The pipelines and the Joint Parties
contend that all the Commission's contemporaneous disclosure
requirement does is to limit the flow of information in the market in a
manner which hinders competition and serves no legitimate purpose.
The pipelines and the Joint Parties assert that with the issuance
of Order No. 636, and the restructuring of all interstate pipelines,
pipelines will no longer retain any transportation capacity. They state
that Order No. 636 prohibits a pipeline from retaining or obtaining
capacity downstream of the point of unbundling on its system except for
storage needed for system management and balancing for no-notice
service, and thus all capacity will be allocated to the pipeline's
shippers. The pipelines and the Joint Parties state that with all of
the pipeline's capacity in the hands of its shippers, the pipeline will
have no control over when the capacity will become available. They
state that availability will depend, to a large degree, on its release
by firm shipper through the pipeline's capacity release program.
Moreover, they state when the capacity does become available (either
through the release program or as interruptible transportation), the
pipeline will have no control over who will get the capacity. They
state that the decision will be solely determined by price paid and
other objective criteria as specified by the releasing shipper and/or
in the pipeline's tariff. The pipelines and the Joint Parties submit
that even if a pipeline knew of a particular gas supply and a demand
for gas in a particular location and proceeded to pass that information
on to its affiliate, no preferential treatment with respect to the
provision of transportation services could result. The pipelines and
the Joint Parties assert that as Order No. 636 has dispelled the
potential for a pipeline to grant an undue preference with respect to
transportation services (the purported reason behind Order No. 497),
the Commission's newly revised contemporaneous disclosure requirement
constitutes nothing more than an arbitrary prohibition against the
normal interactions between affiliates, in a manner which places
pipeline marketing affiliates at an unjustified disadvantage.
Northwest requests that the Commission clarify that it will not
apply standard (f) to any conduct regarding sales or marketing
information prior to the effective date of Order No. 497-D.
Tenneco requests that the Commission clarify that the
contemporaneous disclosure requirement for information regarding on-
system sales and marketing information conveyed by the pipeline to its
marketing affiliate applies only to the transmission of information by
the transportation personnel of the pipeline and not to transmission of
information by the unbundled merchant personnel of the pipeline.
Tenneco believes that such a clarification is reasonable because in the
post-Order No. 636 environment the unbundled merchant will be the
functional equivalent of a marketing affiliate because it will not have
market power over the sale of natural gas. Further, the pipeline
merchant personnel will be required to operate under the exact same
restraints with respect to the pipeline transportation personnel that
marketing affiliate personnel are required to abide by.
2. Commission Ruling
In Tenneco, the court found that ``the contemporaneous disclosure
requirement--at least as it affects information regarding
transportation, where pipelines have monopolistic market power--
reflects a reasonable effort to promote a competitive market without
significantly harming existing efficiencies.''11 However, with
respect to the contemporaneous disclosure of gas sales and marketing
information, the court stated that based on the record it was ``unable
to conclude that standard (f)'s application to sales and marketing is
justified; nor can we be confident that FERC possessed the statutory
authority to regulate the transfer of sales and marketing information
from pipelines to their affiliates.''12 The court remanded the
proceeding to the Commission and stated that ``[o]n remand, the
Commission should consider its justification for applying standard (f)
to sales and marketing information and ensure that the final
requirement is reasonably tailored to meet the Commission's goals of
improving the market and benefitting consumers, as well as preventing
undue discrimination.''13 Upon further review of the issues raised
with respect to the disclosure of certain categories of sales and
marketing information and in light of the court's findings, the
substantive protection of other standards of conduct (particularly
standard(e)),14 structural changes in the industry, and the
restructuring mandated by Order No. 636, the Commission will delete
from the contemporaneous disclosure requirement of standard (f) the
remaining categories of gas sales and marketing information. Pipelines
with marketing affiliates will only be required to contemporaneously
disclose information related to the transportation of natural gas. The
Commission now believes that to impose a general requirement of
contemporaneous disclosure of non-transportation information could have
a chilling effect on pipelines marketing their gas and does not with
any degree of certainty improve the market nor benefit consumers. But
while we are limiting the reach of standard (f), pipelines are not
relieved of their obligations to refrain from unduly discriminatory
conduct that is prohibited under the Natural Gas Act or the Natural Gas
Policy Act, whether or not that conduct is covered by standard (f) or
any of the other standards. Moreover, while the Commission does not
choose to continue a standard requiring contemporaneous disclosure of
certain categories of sales and marketing information at this time,
this does not bar the Commission from examining such questions, if
relevant and necessary, in specific cases.
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\1\1Tenneco at 1199.
\1\2Id. at 1199.
\1\3Id. at 1201.
\1\4Section 161.3(e) states that a pipeline ``may not disclose
to its affiliate any information the pipeline receives from a
nonaffiliated shipper or potential nonaffiliated shipper.''
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The court questioned standard (f)'s applicability to information
generated by the pipeline ``from public sources, or other sources
entirely unrelated to a pipeline's transportation service.''15 The
court also questioned the Commission's assertion ``that the sales and
marketing information pipelines use today is a result of their `past
monopoly power over transportation.'''16 Noting that the marketing
of gas depended on current--not past--information, the court found the
Commission's position ``counter-intuitive.''17 The court stated:
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\1\5Id. at 1200.
\1\6Id.
\1\7Id.
The Commission appears to believe that any advantage a pipeline
gives its marketing affiliate is improper * * * . But advantages a
pipeline gives its affiliate are improper only to the extent that
they flow from the pipeline's anti-competitive market power.18
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\1\8Id. at 1201.
Examined in this light, the Commission now believes that standard (f)
should be narrowed to affect only the disclosure of information related
to the transportation of gas.
Historically, the pipeline collected and maintained extensive data
on natural gas supply and markets. As the primary--if not exclusive--
buyer and seller of natural gas, pipelines had all of the data on
production, consumption and markets for the areas they served. However,
pipelines today are not the dominant sellers of natural gas they were a
decade ago. About 80 percent of the natural gas pipelines deliver today
is shipper-owned gas. Indeed, after the Order No. 636-mandated
restructuring process is complete, nearly 100 percent of natural gas
deliveries will be shipper-owned gas. Also, other structural changes in
the industry further weaken the pipeline's knowledge base.
Increasingly, contract pricing relies on nationwide competitive and
financial market determinations, such as the NYMEX futures market, and
published spot prices. Also, Order No. 636 establishes a short-term
capacity release program for transactions less than 30 days in duration
where even the EBB bidding requirements are waived. Pipelines will be
afforded substantially less information about these types of
transactions than traditionally required. For these transactions
pipelines know where the gas is entering their system, and where it is
redelivered, but may know nothing about the extent of reserves, the
producers' or consumers' circumstances, or the commercial terms of the
sale itself. Often the pipeline does not even know the identity of the
ultimate consumer. Indeed the theory underlying Order No. 636 is that
shippers would have more access to producers and marketers to make
their decisions.
But just as important is the fact that other shippers and producers
will know where gas is entering and being redelivered throughout the
system. Order No. 636 requires that this type of information be
provided during the restructuring process, and through the EBB posting
requirement required during the right-of-first-refusal, and capacity
release programs.
To the extent that a pipeline collects sales and marketing
information from public sources, or from sources outside its
transportation role, release of this information to its marketing
affiliate generally does not in any way relate to the pipeline's
monopoly power over transportation. Unnecessary interference with
communications between a pipeline and its marketing affiliates would
actually reduce competition, by inhibiting one segment of the industry
from vigorously competing with other natural gas sellers. To do
otherwise would create an unlevel playing field tilted against pipeline
merchant service units or marketing affiliates and towards producers,
nonaffiliated marketers, local distribution companies (LDCs), and
others. Rather than a balanced approach, this tilted playing field
would give an unfair advantage to non-pipeline merchants.
The pipeline obtains sales and marketing information from the
public domain, its bundled merchant function or its transportation
activities. The public domain information should not trigger standard
(f), following the Tenneco court's reasoning. The bundled merchant
information is outdated and does not meet the current information
standard mentioned by the court. And finally, the transportation-
generated sales and marketing information cannot be shared with the
affiliate in the first instance given the standard (e)
prohibition.19
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\1\9The only sales and marketing information which could result
from a pipeline abusing its monopoly transportation position by
sharing with a marketing affiliate would come from nonaffiliated
shippers or potential shippers. Since standard (e) prohibits the
pipeline from sharing any information derived from those sources
with its marketing affiliate, the act of sharing such sales and
marketing information both violates standard (e) and triggers the
requirement to comply with standard (f).
---------------------------------------------------------------------------
Standards (f) and (e) are compatible with respect to transportation
information--pipelines could generate and communicate transportation
information to their marketing affiliates without violating standard
(e). For example, as a result of its own engineering flow analysis, a
pipeline could develop information concerning capacity availability. If
that information is shared with a marketing affiliate, standard (f) is
triggered. But since the information was not obtained by the pipeline
from a nonaffiliated shipper or potential shipper, standard (e) is not
violated.
In addition to the protections provided by standard (e), standard
(c) also provides an adequate safeguard against affiliate abuse.
Standard (c) states:
[A pipeline] may not, through a tariff provision or otherwise,
give its marketing affiliate preference over nonaffiliated customers
in matters relating to part 284 transportation including, but not
limited to, scheduling, balancing, transportation, storage, or
curtailment priority.20
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\2\018 CFR 161.3(c).
While these reasons themselves compel modification of standard (f),
further changes in the industry structure, and in pipelines' operations
mandated by Order No. 636 provide additional support. Order No. 636
will both level the playing field for all competitors, and increase the
amount of capacity information available from EBBS to all potential
shippers--marketing affiliates and all other sellers, marketers,
transporters and consumers alike.
First, Order No. 636 requires pipelines to unbundle their own sales
from the transportation service. To do this each pipeline is required
to establish separate operating staffs for pipeline (transportation)
operations and merchant operations (merchant function operating unit).
Each pipeline is also required to treat its merchant function operating
unit as if it were a marketing affiliate, for purposes of compliance
with the standards of conduct and reporting requirements of Order No.
497, et seq. In practice, many pipelines are establishing separate
affiliates to provide the merchant services required by Order No. 636.
This change should further reduce the likelihood that a pipeline would
even have sales or marketing information to pass along to its marketing
affiliate (or merchant function operating unit). Indeed, whatever sales
and marketing information a pipeline would have developed from public
sources would, for the most part, be available to all other competitors
on a similar basis.
In Tenneco the court found
[N]o evidence in the record--and FERC points to none--for the
assertion that the sales and marketing information pipelines use
today is a result of their ``past monopoly over transportation.''
The [FERC's] assertion strikes us as counter-intuitive. The sales
and marketing of gas would seem to depend on current information--a
surmise that is supported by evidence in the record that pipelines'
sales and marketing information includes information developed
through ongoing customer calls and reviews of filings with state and
federal regulatory agencies, trade publications, and market
reports.21
---------------------------------------------------------------------------
\2\1Id. at 1200.
This represents a significant change from past practices. When
pipelines were the primary merchants in the interstate marketplace,
merchant services were provided under long-term contracts on an ``on
demand'' basis. While the pipelines had all of the industry's
information available to them, and operational control over all of the
functions, this information was aggregated over both time (monthly) and
markets. Increasingly, today's merchant services focus on individual
customers and are adjustable on a daily or even hourly basis. The
information needed to drive the old-style merchant services is neither
compatible with nor sufficient to meet the demands of today's
marketplace.
Second, all future sales of gas will take place at pipeline receipt
or pooling points. This requires that the pipeline, acting as a
merchant, and the pipeline's marketing affiliates must sell gas at the
same point on the system as other gas sellers. This places all other
natural gas sellers on a level playing field with marketing affiliates
and the pipeline as a merchant. And because the Commission has mandated
that pipelines allow all shippers flexible receipt, pooling, and
delivery point authority, all shippers should have equal access to
available capacity throughout the system. The designation of pooling
points, the pipeline's point of sale for merchant services, and the
terms and conditions governing flexible point authority are all subject
to negotiations among the pipeline and the parties in individual
restructuring proceedings--not subject to the pipeline's sole
discretion to decide. The result of negotiations over these significant
operating terms and conditions must ultimately be filed by the
pipelines as part of their FERC tariffs and apply equitably to all
shippers whether they purchase from the pipeline or anyone else.
Third, pipelines are encouraged in the Order No. 636 restructuring
process to minimize transition costs by assigning--on a voluntary non-
discriminatory basis--gas supply contracts to their former sales
customers. Pipelines are also allowed 100 percent recovery of
transition costs. These transition provisions are designed to fairly
distribute the burden of the historic legacy of uncompetitive pipeline
purchase arrangements. Coupled with removal of burdensome regulatory
pricing structures, pipeline merchant function operating units should
be left in a position to compete fairly with other merchants without
being saddled with the costs of uncompetitive purchase contracts.
Fourth, Order No. 636 requires pipelines to establish and maintain
EBBs and requires that EBB personnel function independently of the gas
marketing personnel to the maximum extent practicable. Identification
of some of the data to be maintained on the EBB is the subject of
negotiation between the pipeline and the parties to the restructuring
proceedings. However, other data are required by Order No. 636 to be on
the EBB at all times, e.g., length of release, rate, quantity, criteria
for bid evaluation (which criteria was determined during the
restructuring proceeding) and the pipeline must identify all capacity
on its system which is available directly from the pipeline.
Implementation of these EBBs will give all shippers and potential
shippers instant access to the most current information about the
availability of pipeline capacity.
Finally, Order No. 636 creates a capacity releasing program. Under
this program, firm shippers of the pipeline are allowed to resell their
capacity, in whole or in part, and under terms and conditions they
choose, to the highest bidding replacement shipper. Releasing shippers
are also allowed to include specific provisions for the recall of
released capacity, e.g., when temperatures drop below a pre-set minimum
level. Releases may be either permanent or temporary, firm or
interruptible. Coupled with flexible receipt and delivery point
authority, the capacity release program will allow existing firm
shippers to sell their capacity in the pipeline to others. This will
create competition for capacity against the pipeline itself. Although
the pipeline would continue to operate the system, it would no longer
be in sole control over who has access to capacity. Again, the
pipelines and their shippers are expected to work together in
implementing the Order No. 636 restructuring process to decide how the
pipeline will operate in the new unbundled world.
With respect to Northwest's request, the Commission clarifies that
it will not apply standard (f) to any conduct regarding sales or
marketing information prior to the effective date of Order No. 497-D.
Tenneco's request that the Commission clarify that the
contemporaneous disclosure requirement for information regarding on-
system sales and marketing information conveyed by the pipeline to its
marketing affiliate applies only to the transmission of information by
the transportation personnel of the pipeline and not to transmission of
information by the unbundled merchant personnel of the pipeline is
moot. The Commission notes, however, that standard (f), in any form,
applies only to the pipeline in its relationship with its marketing
affiliate, and now, because of Order No. 636, its unbundled merchant
division is the functional equivalent of a marketing affiliate.
B. The Elimination of the Filing of Form 592
1. Requests for Rehearing
The Indicated Parties assert that the Commission erred in
permitting interstate pipelines to cease to submit the affiliated
transportation log (Form 592) 90 days after the Commission has
determined that an individual pipeline is in full compliance with Order
No. 636. The Indicated Parties submit that the information available on
Form 592 may be more essential after a pipeline complies fully with
Order No. 636 than it is now. The Indicated Parties state that
following full compliance with Order No. 636, an interstate pipeline
will be permitted to sell natural gas at negotiated prices. In this
environment, the Indicated Parties argue that such a pipeline may be
motivated to favor its own sales of gas as well as sales made by its
marketing affiliates. For example, the Indicated Parties contend that
to obtain a sale at the expense of other sellers, a pipeline could sell
its gas at a loss or a very low price, but charge the full
transportation rate. The Indicated Parties assert that this would allow
the pipeline to avoid the correlative discount rule under
Sec. 161.3(i), and charge all other sellers the maximum transportation
rate rather than discounting to obtain the transportation business. The
Indicated Parties argue that to remain competitive, non-affiliated
sellers would be forced to reduce their gas prices below what they
would charge if the pipeline discounted its transportation rates rather
than the price at which the pipeline merchant function sells its gas.
The Indicated Parties contend that the non-affiliated sellers would
suffer a loss because they would be forced to sell their gas at a loss
and pay the full transportation rate. The Indicated Parties assert that
the pipeline, however, would not suffer the same economic detriment
because it would receive the full transportation rate on the movement
of its gas. The Indicated Parties submit that they and other competing
merchants will be unable to monitor and detect such favoritism without
the information provided on Form 592.
The Indicated Parties assert that the difficulty with the
elimination of the filing of Form 592 is that the Commission and the
industry have no experience with the operation of EBBs by a pipeline in
full compliance with Order No. 636. The Indicated Parties argue that
the Commission cannot find that the EBBs will prove to be a reliable
and accurate source of the information now supplied on Form 592. The
Indicated Parties state that in light of this practical experience, the
Commission recently requested comments on the configuration and
operation of EBBs in Docket No. RM93-4-000. The Indicated Parties state
that in the list of questions on which comments were requested the
Commission asked whether ``any of this information [available on the
EBBs can] be used to fulfill existing FERC reporting requirements?''
The Indicated Parties contend that this request demonstrates that the
EBBs are an unproven means of communicating the information now
available on Form 592. The Indicated Parties state that even though it
had requested comments on whether it could eliminate any of its current
reporting requirements, the Commission, without even waiting for an
answer to its question, erroneously assumed in Order No. 497-D that the
answer would be ``yes'' and eliminated one of its reporting
requirements. The Indicated Parties submit that the disparity between
the requests for comments and the elimination of a reporting
requirement in Order No. 497-D demonstrates that the Commission acted
in an arbitrary and capricious manner without substantial evidence in
eliminating the filing of Form 592. The Indicated Parties assert that
the Commission has failed to protect the public interest with its
elimination of the requirement that pipelines file Form 592. The
Indicated Parties argue that the Commission should grant rehearing and
reinstate the requirement that pipelines file Form 592.
Hadson also asserts that the Commission erred in eliminating the
filing of Form 592. Hadson states that under Order No. 636 pipelines
will be able to conduct an essentially deregulated gas merchant
business under the pipeline's corporate entity and while sharing key
personnel. Hadson contends that this arrangement, which it does not
oppose in and of itself, nonetheless creates additional opportunities
for the pipeline-transporter to favor both its own merchant division as
well as its affiliates and that this increases rather than diminishes
the need for public scrutiny. Hadson argues that, at a minimum,
deregulating the pipeline-merchant can certainly not be invoked as
grounds for a decrease in the need for public monitoring by the
industry watchdog. Finally, Hadson notes that even requiring the same
information to be disclosed on an EBB is materially different from
requiring the information to be filed with the Commission under the
Natural Gas Act since filings with the Commission are subject to 18
U.S.C. 1001 while postings on an EBB are probably not.
Tenneco asserts that while the Commission recognized in Order No.
497-D that the EBB requirements in Order No. 636 obviate the need for
pipelines to file Form 592 with the Commission, the Commission failed
to recognize that certain information currently required in Form 592
will have little use to anyone in the post-Order No. 636 world.
Tenneco states that Item Nos. 7 and 8 require that a pipeline
report the position of its marketing affiliate in the pipeline's
transportation queue and the total number of requests in the queue
respectively. Tenneco submits that in the unbundled world pipelines
will allocate available capacity among requesting shippers not on a
first-come, first-served basis, but on the basis of the relative value
of the request to the pipeline. Tenneco states that the value of the
requests for transportation will involve a calculation based on the
price offered and the term of the request, and the precise method of
determining which offer has the highest value to the pipeline will be
stated in the pipeline's tariff. Tenneco asserts that without a first-
come, first-served queue in effect, there is no advantage to be gained
by maintaining these two information requirements. Tenneco further
asserts that the pipeline capacity release programs will provide yet
another avenue through which shippers desiring firm transportation
capacity can obtain it, thus further reducing the utility of the
required information. Tenneco contends that these changes brought about
by Order No. 636 will thus eliminate the need for pipelines to report
the queue position of their marketing affiliates and the total number
of requests in the queue.
Tenneco states that Item Nos. 23 and 24 require pipelines to report
whether or not the pipeline will receive take-or-pay credits for
transporting an affiliate's gas and what percentage of the gas
transported will be subject to credit. Tenneco states that because the
Commission's take-or-pay crediting program terminated on December 31,
1990, pipelines have not been able to receive take-or-pay credits since
December 31, 1990. Therefore, Tenneco asserts that maintaining this
requirement serves no purpose.
Tenneco states that Item No. 32 requires pipelines to identify the
location of the producing fields from which gas requested to be
transported for an affiliate originates. Tenneco argues that with the
implementation of flexible receipt and delivery points and capacity
release, this information becomes useless. Tenneco contends that
shippers will be using secondary receipt points on their own contracts
and acquiring each other's capacity much more than they have
historically. Tenneco asserts that this is precisely the outcome that
the Commission is trying to bring about by mandating flexible receipt
and delivery points and capacity release. Tenneco submits that with
this increase in the number of transportation transactions that involve
the use of points other than the primary receipt or delivery point of
the entity requesting transportation, requiring pipelines to report
this information serves no purpose.
Tenneco states that Record No. 3 requires pipelines to report
requested receipt and delivery points for transportation requests of
their marketing affiliates. Tenneco asserts that the advent of flexible
receipt and delivery points renders this information useless. Tenneco
argues that the marketing affiliate, like any other shipper, will have
the firm right to use any receipt or delivery point on the system to
the extent that capacity is available. Thus, Tenneco contends the
utility of maintaining a list of requested receipt and delivery points
is vastly diminished.
Because the information required by Item Nos. 7, 8, 23, 24, and 32
of Schedule 2 and all of Schedule 3 will no longer have value after
full compliance with Order No. 636, Tenneco requests that the
Commission clarify that this information need not be maintained on
pipelines' EBBs. Tenneco asserts that eliminating the requirement to
report it is consistent with the Commission's goal to decrease
needlessly burdensome regulation. Tenneco requests expedited action on
this issue as pipelines are currently setting up their EBBs, and a
swift affirmative response will enable the new EBBs to more accurately
reflect the required information.
2. Commission Ruling
The Commission denies the Indicated Parties' and Hadson's requests
for rehearing. Their arguments lose sight of the fact that the Form 592
information must still be provided electronically, thus allowing
interested parties and the Commission staff to monitor the activities
of pipelines and their affiliates and to initiate the appropriate
action when evidence of discrimination in favor of affiliates exists.
The Indicated Parties' concerns about obtaining reliable and accurate
Form 592 information are unfounded. Section 250.16(g)(2) states that:
An interstate pipeline must provide 24-hour access, by
electronic means, to the data specified in paragraph (b)(2) of this
section. Access to the information must be provided once the service
has begun. A pipeline must, on a daily basis, either update the
information or indicate that no changes have occurred in the log
information.
Most pipelines satisfied this requirement through the use of EBBs
in the past, and Order No. 636 now mandates EBBs. Interested parties
have been receiving and will continue to receive the Form 592
information electronically. Thus, the Indicated Parties' argument that
the Commission and the industry have no experience with EBBs is
inaccurate. Moreover, the requirements of Order No. 636 ensure that
each pipeline's Order No. 497 EBB must provide for: (a) Downloading by
users; (b) daily back-up of information, which must be available for at
least three years; (c) purging information on completed transactions
from current files; (d) display of most recent entries ahead of
information posted earlier; and (e) on-line help, a search function and
a menu that permits users to separately access records in the
transportation log and standards of conduct information.22 These
features allow shippers to take the information that is currently filed
on Form 592s off the pipelines' EBBs and obtain access to the
information up to three years after it is posted.23 In these
circumstances, the burden on the pipelines from filing Form 592s and
the administrative burden on the Commission from collecting them
outweighs any benefits of collecting the data in hard copy.
---------------------------------------------------------------------------
\2\218 CFR 284.8(b)(4) and 284.9(b)(4).
\2\318 CFR 284.8(b)(4) and 284.9(b)(4).
---------------------------------------------------------------------------
The Commission also does not believe that Hadson's argument relying
on 18 U.S.C. 1001 is a valid reason for maintaining the Form 592 filing
requirement. Section 1001 states:
Whoever, in any matter within the jurisdiction of any department
or agency of the United States knowingly and willfully falsifies,
conceals or covers up by any trick, scheme, or device a material
fact, or makes any false, fictitious or fraudulent statements or
representations, or makes or uses any false writing or document
knowing the same to contain false, fictitious or fraudulent
statement or entry, shall be fined not more than $10,000 or
imprisoned not more than five years, or both.
Hadson's argument implies that because a hard copy of the Form 592
information will not be filed with the Commission pipelines will
knowingly provide inaccurate or incorrect information through
electronic means. The Commission believes that the language of the
statute is broad enough to cover electronic postings. However, in order
to prevent any such fraudulent conduct, the Commission deems the
electronic posting of the Form 592 information equivalent to a filing
for purposes of 18 U.S.C. 1001.
Since contemporaneously with this order the Commission is issuing a
Notice of Proposed Rulemaking (NOPR) which proposes to revise Order No.
497's reporting requirements, including Form 592, the Commission will
not address Tenneco's request to delete certain parts of Form 592.
C. Application of Order No. 497 to Ozark
1. Request for Rehearing
Ozark asserts that the Commission's order on remand ignores the
court's instructions requiring the Commission to consider the effect of
Ozark's evidence on the question of control. Ozark contends that it
simply relies upon an equally deficient rationale for concluding,
without reference to any evidence, that Tennessee Ozark and Ozark
Pipeline Corporation each, individually, ``controls'' Ozark, thereby
making the marketing affiliates of those partners marketing affiliates
of Ozark. Ozark submits that to avoid problems inherent in finding that
these partners can exercise ``affirmative control'' over Ozark, the
Commission concluded that they can exercise ``negative control'' by
simply withholding their vote and vetoing any transportation
transaction that would compete with their respective marketing
affiliates.
Ozark argues that the ability to withhold a vote or ``veto'' any
particular transaction does not exist as far as open access
transportation arrangements are concerned. Ozark states that open
access pipelines, including Ozark, are required by Secs. 284.8(b) and
284.9(b) to transport natural gas on an open and non-discriminatory
basis. Ozark asserts that it is clearly prohibited from taking actions
that would unduly prefer the marketing affiliates of Ozark's partners
and Ozark's partners have an obligation to the partnership to operate
the pipeline within legal parameters.
Ozark submits that its Commission-approved firm and interruptible
rate schedules establish the criteria which control who receives
transportation service from Ozark. Ozark contends that decisions as to
who will be permitted to ship on Ozark may not be made at the whim of a
particular Ozark partner. Ozark asserts that if the tariff criteria are
met, the request must be granted. Ozark states that, in fact, at a
Management Committee meeting held on June 26, 1991, Ozark's Management
Committee, consisting of representatives of each of the partners, voted
unanimously to approve a resolution authorizing the President of Ozark
or his designee to execute interruptible transportation agreements on
behalf of Ozark. Thus, Ozark contends, each of the partners ceded to
the Operator the authority to enter into interruptible transportation
agreements. Ozark argues that no partnership vote is required and the
Operator is bound by the tariff. Ozark asserts that it should be
obvious that not only are Tennessee Ozark and Ozark Pipeline
Corporation not free to veto transportation transactions but each has
relinquished any right it might otherwise have to vote on such
transactions.
Ozark submits that the record before the Commission shows an
absence of control. Ozark asserts that the record before the Commission
shows a complete absence of any vetoing of any transportation
transaction by any Ozark partner, consistent with the delegation of
authority to enter into such transportation agreements. Ozark argues
that the Operator is required to act in accordance with its fiduciary
responsibilities to the partnership, not inconsistent with those
responsibilities. Ozark contends that the Commission's finding here
that one partner could prefer its marketing affiliate by vetoing
transportation for others is directly contrary to the Commission's
prior findings in this case that ``[t]here are no facts before us in
this proceeding which indicate that Ozark has discriminated in offering
transportation services to any party.''24
---------------------------------------------------------------------------
\2\4Citing, Ozark Gas Transmission System, 43 FERC 61,443 at
62,108 (1988).
---------------------------------------------------------------------------
Ozark submits that previously the Commission assumed that the Ozark
partners would act together to provide preferences to marketing
affiliates of one of the partners or that one of the Ozark partners
would be willing to grant preferences to their Ozark partners in the
hopes of obtaining reciprocal preferences. Ozark states that here the
Commission assumes that one of the partners will simply veto
transactions that would benefit the partnership because the transaction
might compete with a transaction of one of its affiliates. Ozark
asserts that there is no evidence to support any such assumption. Ozark
contends that to make such a finding the Commission would have to
assume that Ozark would violate its tariff, the Commission's
regulations, and Texas partnership law. Ozark argues that the
Commission would also have to assume that its prior finding that there
are no facts showing discrimination in Ozark's offering of
transportation is wrong. Ozark submits that not one of these
assumptions is logical, consistent with any information relating to
Ozark, or supported by evidence in the record. Ozark asserts that all
of the evidence shows that such control does not exist including the
fact that numerous transportation transactions have been conducted by
Ozark for independent marketers which compete with the marketing
affiliates of Ozark partners.
Ozark states that its decisions as to who it will ship for are
subject to review by this Commission and this Commission's complaint
procedures. Ozark contends that if the Commission were to find that
Ozark had engaged in such conduct, enforcement proceedings would
commence and Ozark would either be ordered to provide the service
required or its blanket certificate would be revoked.
Finally, Ozark argues that it does not control any of its
individual partners, is not controlled by any of its individual
partners, and is not under common control with any of its individual
partners. It asserts that nothing in the record before the Commission
suggests the contrary.
Ozark also contends that the Commission erred to the extent that it
relied on the modified definition of ``control.'' Ozark states that in
Order No. 497-A the Commission modified the definition of ``control''
in Sec. 161.2. Ozark states that on January 16, 1990, it sought
rehearing of Order No. 497-A. Ozark states that the Commission issued
an order granting rehearing for purpose of further consideration but
the Commission has never, to the best of Ozark's knowledge, issued an
order on the merits of Ozark's rehearing request. Ozark states that
three years have passed and numerous orders utilizing the definition
have issued, including the order in this proceeding, and it considers
its request for rehearing as having been denied. However, to the extent
that the Commission is applying the revised definition to support the
result here, Ozark seeks rehearing.
Ozark asserts that the Commission's order is not at all clear
whether it is relying upon the modified definition of ``control'' to
support its decision here. If the Commission's decision rests at all on
``whether acting alone or in conjunction with others'' language, Ozark
submits that the Commission's decision is in error. Ozark argues that
the effect of the additional language is to establish ``control'' in a
1% voting interest owner of a corporation. Ozark asserts that the
language creates an irrebuttable presumption of ``control'' by anyone
holding at least a 10% voting interest in a corporation, contrary to
the clear statement in the balance of the regulation that the
presumption of control is rebuttable. Ozark contends these two effects
result from the indisputable fact that any interest holder must act
with the requisite plurality in order for any particular action to be
taken by a corporation or a partnership. Ozark states that in its case
unanimity is required for most actions so all partners must vote in the
affirmative in order for particular action to be taken. Ozark asserts
that the fact that unanimity is required, again, does not constitute
control but, rather, evidences a lack of control. Accordingly, Ozark
submits that the modified definition is inconsistent with the existence
of a rebuttable presumption, is arbitrary and capricious, and lacks any
basis in reasoned decisionmaking.
2. Commission Ruling
The Commission rejects Ozark's request for rehearing. Ozark argues
that the Commission's definition of ``control'' is inconsistent with
the existence of a rebuttable presumption. We disagree. Section 161.2
states that ``control (including the terms `controlling,' `controlled
by,' and `under common control with') includes, but is not limited to,
the possession, directly or indirectly and whether acting alone or in
conjunction with others, of the authority to direct or cause the
direction of the management or policies of a company. A voting interest
of 10 percent or more creates a rebuttable presumption of
control.''25 In Order No. 497-A, the Commission specifically
addressed the issue of joint venture pipelines and stated that
overlapping interests create an incentive to grant an affiliate
preference.26 The Commission applied the definition in section
161.2 to several pipelines that had requested rehearing, including High
Island Offshore System, U-T Offshore System, Trailblazer Pipeline
Company, Sea Robin Pipeline Company, Northern Border Pipeline Company
and Great Lakes Gas Transmission Company.27 In Tenneco, the court
upheld the definition of control and the way in which the Commission
applied it to Northern Border Pipeline Company. In considering Ozark's
petition for review, the court remanded the Commission's application of
the term ``control'' but not the definition of the term. Thus, Ozark's
request for review of the definition of control is a collateral attack
on Order No. 497-A and the Commission rejects it.
---------------------------------------------------------------------------
\2\518 CFR 161.2.
\2\6Order No. 497-A at 31,593.
\2\749 FERC 61,340 (1989).
---------------------------------------------------------------------------
To consider whether there is control here, we will review all the
evidence Ozark has submitted on the issue. On March 10, 1987, Ozark
filed an application under section 7 of the Natural Gas Act for a
certificate of public convenience and necessity. In that application,
Ozark stated that it is a partnership and submitted its partnership
agreement, which shows that Ozark is jointly owned by four
partners,28 that the partnership will be managed by a management
committee, which will consist of equal representatives from each
partner, and will be operated by OPGC. In addition, OPGC selects the
President of Ozark, who also acts as the CEO and the Chairman of the
management committee. On July 5, 1988, Ozark emphasized that its
General Partnership agreement specifies that no action may be taken by
the management committee except by unanimous approval. On January 3,
1993, Ozark presented, for the first time, a partial copy of a
corporate resolution dated June 26, 1991. This states that ``the
President of Ozark or his designee is hereby authorized to execute
interruptible transportation agreements on behalf of Ozark.'' Because
Ozark's partners ceded to the President the authority to enter into
interruptible transportation agreements, no partnership vote is
required. All of Ozark's firm capacity is committed to Tennessee Gas
Pipeline Company and Columbia Gas Transmission Corporation. Therefore,
Ozark claims that its partners cannot ``control'' transportation either
affirmatively or negatively through veto power.
---------------------------------------------------------------------------
\2\8Ozark's owners are:
1. Ozark Gas Pipeline Corporation (OPGC), which is a direct
subsidiary of USX Corporation. Other subsidiaries include, TXO
Production Company, Marathon Oil Company and Delhi Gas Marketing
Corporation. The activities of TXO Production Company, the marketing
affiliate, have been subsumed into Marathon Oil Company. However,
TXO Production Corporation still ships on Ozark, as does Delhi Gas
Marketing Corporation, another marketing affiliate.
2. Tennessee Ozark Gas Pipe Company, which is a wholly-owned
subsidiary of Tennessee Gas Pipeline Company, which is in turn, a
wholly owned subsidiary of Tenneco, Inc. Tennessee's marketing
affiliate is Tenngasco Corporation (Tenngasco), which is a shipper
on Ozark.
3. Columbia Gulf Transmission, which is a wholly-owned
subsidiary of the Columbia Gas System, Inc. Columbia Gas' marketing
affiliate, Columbia Gas Development Corporation ships on Ozark; and
4. Caney River Transmission Company, which is a wholly-owned
subsidiary of ONEOK, Inc.
---------------------------------------------------------------------------
We disagree. The partners still have authority to direct the
management and policies of Ozark and could, at any time, revoke the
authority over interruptible transportation from the President.
Moreover, under the terms of the partnership agreement, OPGC selects
the President of Ozark and operates Ozark. OPGC's marketing affiliates
ship on Ozark. OPGC has the requisite control described in section
161.2 of the Commission's regulations because it operates Ozark and,
through the President it selects, manages the pipeline.
In addition, ``control'' is not limited to authority over firm or
interruptible transportation. Informal actions of the management
committee or the partners could provide the marketing affiliates with
significant advantages, such as non-public transportation information.
For example, if Ozark intends to build a new pipeline under Part 284 of
the Commission's regulations, the partners could convey that
information to their marketing affiliates, and the marketing affiliates
would have an advantage over nonaffiliated marketers in obtaining
customers. Likewise, information with respect to the addition of new
receipt of delivery points could be of significant advantage to the
marketing affiliates.
Ozark also states that it has not discriminated in the past and
that no Ozark partner has vetoed any transportation transactions. Ozark
asserts that its operating structure together with its history should
serve to successfully rebut a presumption of control. But the partners'
ability to control the management and policies of the pipeline is not
linked to whether Ozark has discriminated in the past. In Order No.
497, the Commission found sufficient anticompetitive conduct industry-
wide to substantiate the need for the rule. The court upheld the rule
in Tenneco. The Commission need not produce evidence of discrimination
with respect to each pipeline to justify application of the rule to any
one pipeline.
Finally, Ozark argues that it is subject to the undue
discrimination provisions of section 4 of the NGA and therefore will
not discriminate in favor of its affiliates.29 Despite these
prohibitions, the Commission found the need for additional guidelines
to deter anticompetitive conduct and concluded in Order No. 497 that
standards of conduct and reporting requirements were
appropriate.30 Ozark's argument that it should not be subject to
Order No. 497 because it is subject to other regulations is
inconsistent with the purposes of Order No. 497.
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\2\9Section 4 of the NGA as well as 18 CFR 284.8(b) and 284.9(b)
generally prohibit a pipeline from granting an undue preference to
any person.
\3\0Notice of Proposed Rulemaking on Inquiry Into Alleged Anti-
Competitive Practices Related to Marketing Affiliates of Pipelines,
52 FR 21578 (June 8, 1987), FERC Stats. & Regs. 32,445 at 33,563-5
(1987).
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D. Standards of Conduct Filings
1. Request for Rehearing
Hadson asserts that the Commission's procedures for acting on
Secs. 161.3(j) and 284.286(e) filings are illegal. Hadson states that
the Commission treats these filings as non-tariff filings which are
assigned an MG docket prefix. Hadson states that according to
Sec. 161.3(j) the filings are made to enable shippers and the
Commission to determine how the pipeline is complying with the
substantive standards of conduct. Hadson submits that the filings
cannot achieve this purpose, however, since they are withheld from
public notice in the Federal Register and in the Commission's daily
orders. Hadson contends that they are effectively concealed from public
view in the great majority of cases since shippers and other interested
members of the public have no way of knowing when to look to find a new
or revised MG filing.
Hadson states that, moreover, the Commission has ruled that the MG
filings are non-adversarial and that the Commission may therefore rely
upon non-public and off-the-record communications in determining
whether a pipeline is in compliance with the substantive standards or
not.31 Hadson states that the Commission has further ruled that no
one may protest or intervene in the non-public proceedings. Hadson
states that any attempt to assert that a compliance filing is not in
compliance with the law will be redocketed in a new proceeding and
treated as a complaint in which the erstwhile protestant bears the
burden of conducting discovery to prove that a pipeline's compliance
filing is not in compliance with the law, rather than the pipeline
being responsible for showing compliance.\32\
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\3\1Citing, ANR Pipeline Co., et al., 55 FERC 61,260 at 61,833,
n. 6 (1991), order on reh'g and clarification sub nom., Algonquin
Gas Transmission Co., et al., 58 FERC 61,143 (1992).
\3\2Id.
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Hadson argues that similar problems taint the filings under section
284.286 since Order No. 636 appears to generally incorporate the
existing procedures and relies upon them to support the effective
deregulation of the unbundled pipeline merchants under the Subpart J
certificates. Hadson states that the basis for this conclusion is that
Order No. 636 appears to maintain the dichotomy between tariff
provisions (which presumably would be made in an MT or successor
docket) and procedures (which filing requirement, the Commission
states, would be similar to that of Sec. 161.3(j)).33 Hadson
asserts that the primary difference between the new and the current
procedures, and the only apparent reason for not incorporating
Sec. 161.3(j) along with the various other sections which were
incorporated by reference, is that the new rules have deleted the
statement that the filing will enable shippers and the Commission to
determine how a pipeline is complying with the standards of conduct.
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\3\3Citing, Order No. 636, III FERC Stats. & Regs. at 30,442, n.
232.
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Hadson contends that the deletion of the phrase is apparently not
accidental since it accurately reflects the fact that the new filing
will not enable shippers or any other member of the public to (1) learn
how a given pipeline defines ``operating employee'' or how it
interprets the phrase ``practicable,'' (2) receive notice of any such
filing, (3) have an opportunity to comment thereon, or (4) obtain a
decision based upon public evidence compiled in a public record in
accordance with applicable law.
Hadson states that faced with the Commission's determination to
leave the definitional difficulties to be resolved in the individual
restructuring dockets, it did not seek judicial review of Order No. 636
on these issues and has diligently raised these points in its comments
on various pipelines' proposed Order No. 636 compliance plans.
Hadson asserts that the issue here is whether the Commission may
rely upon what Hadson calls the stealth procedures of section 161.3(j)
for purposes of making its decision in this docket to eliminate the
publicly available monitoring requirement. For the reason set forth
above, Hadson submits that the Commission cannot do so.
2. Commission Ruling
The Commission rejects Hadson's argument that its procedures for
acting on Sec. 161.3(j) and Sec. 284.286(e) filings prohibit public
participation. Hadson misinterprets Sec. 284.286(e). It requires
pipelines to file procedures for complying with standards of conduct as
part of their publicly noticed compliance filings.34 Any
interested person can participate in those proceedings and protest
pipelines' proposals for complying with the standards. All the
pipelines' compliance filings have been publicly available and Hadson,
as well as other interested persons, have had ample opportunity to
comment on those procedures. In fact, Hadson intervened in 91
restructuring proceedings and filed comments with respect to several
pipelines' standards of conduct.35 Contrary to Hadson's claims of
``stealth,'' the Commission's decisions with respect to the standards
of conduct will be reviewed in the context of the restructuring
proceedings.
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\3\4Order No. 636-A, III FERC Stats. & Regs. Preambles, 30,950
at 30,623-4 (1992).
\3\5See Hadson's comments in Florida Gas Transmission Company in
Docket No. RS92-16-000, et al., Texas Gas Transmission Corp. in
Docket No. RS92-24-000, Natural Gas Pipeline Company of America in
Docket No. RS92-45-000.
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The public also participated in the proceedings in which the
Commission reviewed the standards of conduct pipelines had filed before
Order No. 636 required restructuring. Although the Commission labeled
these proceedings as ``non-adversarial,''36 and invited the public
to file complaints,37 it also addressed all requests for rehearing
of the May 1991 standards of conduct decisions (these dockets have the
prefix MG).38 Eight parties sought rehearing of the May 1991 MG
orders.39 Of those, IGM asked the Commission to address its
previous protests.40 In the Order on Rehearing, the Commission
individually addressed each of IGM's previous allegations concerning
pipelines' implementation of the standards.41 Hadson had the same
opportunity to file comments and protests in the pipelines' pre-Order
No. 636 standards of conduct (MG) proceedings and did not.
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\3\6Algonquin Gas Transmission Co., et al., 55 FERC 61,260 at
61,833, n. 6 (1991).
\3\7Algonquin Gas Transmission Co., et al., 55 FERC 61,261 at
61,836 (1991).
\3\8Section 385.713 of the Commission's regulations gives
parties 30 days to request rehearing after the Commission issues a
final order. 18 CFR 385.713 (1993).
\3\9Algonquin Gas Transmission Company, Carnegie Natural Gas
Company, Independent Gas Marketers (IGM), Panhandle Eastern Pipeline
Company, Southwest Gas Storage Company, Trunkline Gas Company, Texas
Eastern Transmission Corporation, and Vesta Energy Company.
\4\058 FERC 61,143 at 61,455 (1992).
\4\1Id., at 61,455-60.
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Finally, Hadson incorrectly states that the Commission treated the
MG filings as non-public. These filings are public and are available
through the Commission's Records Information and Management System. In
addition, all conversations that occurred between the Commission staff
and pipelines were memorialized in memoranda that were placed in the
Commission's public files.42 The public had an opportunity to
raise issues concerning those conversations during rehearing of the May
1991 orders.
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\4\2ANR Pipeline Co. et. al., 55 FERC 61,260 at 61,833, n. 6.
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Therefore, not only are the MG filings public, but contrary to
Hadson's assertions, they have no real relation to our decision to
eliminate the requirement to file Form 592s. The MG dockets concern the
pipelines' general implementation of the standards of conduct. In
contrast, Form 592 is a log of specific transportation transactions. As
stated, we are eliminating the requirements to file Form 592s because
the information contained in them will be available on pipelines'
EBBs.43
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\4\3See discussion at Section IV.B.
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However, the Commission does agree that, prospectively, it can
facilitate access to pipelines' standards of conduct filings by
publicly noticing them. As a result, the Commission will require all
future standards of conduct filings made under Sec. 161.3(j) and all
requests for waiver of the standards to include form notices suitable
for publishing in the Federal Register.
E. Interpretation of ``Operating Employee''
In response to questions raised by Hadson and other companies and
in order to assist pipelines in their compliance with the separation of
operating personnel as required by Standard G and the reporting
requirements of Sec. 250.16(b), the Commission will clarify what type
of employee it considers an ``operating employee.''
Standard G, 18 CFR 161.3(g), states that ``[t]o the maximum extent
practicable a [pipeline's] operating employees and the operating
employees of its marketing affiliate must function independently of
each other.'' In addition, under the reporting requirements of
Sec. 250.16(b), ``[a]n interstate pipeline must file * * * (1)[n]ew and
existing tariff provisions containing * * * (i) [a] complete list of
operating personnel and facilities shared by the interstate natural gas
pipeline and the affiliated marketing or brokering company.''
While not mandating organizational separation, Standard G ensures
against affiliate preference and the discriminatory dissemination of
information by requiring a pipeline to provide, to the maximum extent
practicable, for the independent functioning of ``operating personnel''
of the pipeline and its marketing affiliate. The contemporaneous
disclosure mandate of Standard F requires that to the extent a pipeline
provides to a marketing affiliate any information related to
transportation of natural gas, it must provide that information
contemporaneously to all potential shippers, affiliated and
nonaffiliated, on its system. Standard G's requirement that operating
employees are to function independently to the maximum extent
practicable will help ensure that the opportunity to share such
information is minimized. If, for example, a pipeline and its marketing
affiliate could evade the contemporaneous disclosure requirement simply
by using the same person to arrange transportation on the pipeline and
market gas for the affiliate, the rule would be substantially
undermined.
Throughout the rulemaking proceeding, however, the Commission has
held that complete divestment, divorcement, or organizational
separation of pipelines and their marketing affiliates is not necessary
to prevent the abuses at which the marketing affiliates rule is aimed.
The independent functioning requirement does not require a pipeline to
separate all of its employees from those of a marketing affiliate, but
rather only operating employees. This determination is consistent with
the Commission's finding that complete organizational separation is
unnecessary and may even be harmful where divestment chills essential
day-to-day communications between the pipeline and its affiliate.
The Commission stated in Order No. 497-A that the phrase
```operating employees' can include officers, directors and managers as
well as non-management employees.''44 However, without further
clarification of that phrase, pipelines may not be able to identify
properly every ``operating employee,'' especially those shared with
their affiliate. Since different pipelines are faced with different
practical circumstances, a person's status as an ``operating employee''
will, in many situations, depend not on his or her occupation or title,
but on his or her actual function within the company.
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\4\4Order No. 497-A at 31,598.
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To provide further guidance, the Commission interprets ``operating
employee'' to mean an individual who has day-to-day duties and
responsibilities for planning, directing, organizing, or carrying out
gas-related operations, including gas transportation, gas sales or gas
marketing activities. Examples of operating employees include any
member of the board of directors, officers, managers, supervisors,
regulatory and technical personnel with duties involving day-to-day gas
purchasing, marketing, sales, transportation, operations, dispatching,
storage, or related activities. Such operating employees may be
expected to receive and use information concerning such functions for
the benefit of the specific entity for which they work directly. Under
normal circumstances, employees, including highly-placed operatives
such as members of the board of directors or officers of the
corporations, who do not have such duties would not be likely to
receive or use transportation-related information subject to Standard
F. To the extent a non-operating person obtains such information and
provides it to the marketing affiliate, the pipeline would be required
to disclose the information contemporaneously pursuant to Standard F.
Employees with no direct operational responsibilities and whose
duties are only supportive in nature need not be considered operating
employees. Examples of non-operating employees include support
personnel not engaged in the day-to-day marketing, sales,
transportation or other gas-related operations of the affiliated
companies, clerical and secretarial staff, general office building
maintenance personnel, and payroll and general accounting staff.
F. Extension of Reporting Requirements
Finally, the Commission will only extend the sunset date of Order
No. 497's reporting requirements from December 31, 1993, until June 30,
1994, because contemporaneously with this order the Commission is
issuing a NOPR in Docket No. RM94-6-000 which, among other things,
substantially revises Order No. 497's reporting requirements. The
Commission believes that extending the sunset provision to June 30,
1994, will allow the Commission enough time to issue a final rule
setting forth the new reporting requirements and will also prevent any
gaps in the reporting requirements which would occur if the Commission
simply let the sunset provision lapse.
V. Information Collection Statement
Office of Management and Budget (OMB) regulations require approval
of certain information collection requirements imposed by agency
rules.45 The subject order does not establish any new information
collection requirements and does not reduce the reporting requirements
under FERC-592, Marketing Affiliates of Interstate Pipelines, as
revised by Commission Order Nos. 497-D and 636 (OMB Control No. 1902-
0157).
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\4\55 CFR 1320.14.
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The information required under FERC-592 enables the Commission to
carry out its legislative mandate under the NGA and NGPA and will help
ensure a viable capacity release market under the Commission's Order
No. 636. Specifically, the required information allows the Commission
to review/monitor pipeline transportation, sales, and storage
transactions with its marketing affiliates to deter undue
discrimination and to take appropriate action, where and when
necessary. The information is also used by others to indicate whether
or not there has been discrimination in pipeline/affiliate/nonaffiliate
transactions.
The Commission is notifying OMB that there is no change in the
FERC-592 reporting requirements as a result of the subject order and
requesting that OMB extend its approval of FERC-592 through June 30,
1994. The 180-day extension of FERC-592 is necessary to allow the
Commission adequate time to prepare a final rule based on the related
NOPR, issued concurrently with this order, in Docket No. RM94-6-000
(Standards of Conduct and Reporting Requirements for Transportation and
Affiliate Transactions).
Interested persons may obtain further information by contacting the
Federal Energy Regulatory Commission, 941 North Capitol Street, NE.,
Washington, DC 20426 [Attention: Michael Miller, Information Services
Division, (202) 208-1415]. Comments on the FERC-592 reporting
requirements may also be sent to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20503 [Attention: Desk Officer for Federal Energy Regulatory
Commission].
VI. Effective Date
Section 553(d) of the Administrative Procedure Act (APA)46
generally requires a rule to be effective not less than 30 days after
publication in the Federal Register unless good cause is found to
shorten the time period. The sunset date for the reporting requirements
will expire before the APA's 30 day publication requirement has been
fulfilled thus causing a gap in the reporting requirements. Therefore,
in order to prevent a gap in the rule's reporting requirements, this
final rule is effective January 1, 1994.
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\4\65 U.S.C. 553(d).
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List of Subjects
18 CFR Part 161
Natural gas, Reporting and recordkeeping requirements.
18 CFR Part 250
Natural gas, Reporting and recordkeeping requirements.
By the Commission.
Lois D. Cashell,
Secretary.
In consideration of the foregoing, the Commission amends parts 161
and 250, chapter I, title 18 Code of Federal Regulations as set forth
below.
PART 161--STANDARDS OF CONDUCT FOR INTERSTATE PIPELINES WITH
MARKETING AFFILIATES
1. The authority citation for part 161 continues to read as
follows:
Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.
2. In Sec. 161.3, paragraph (f) is revised to read as follows:
Sec. 161.3 Standards of conduct.
* * * * *
(f) To the extent it provides to a marketing affiliate information
related to transportation of natural gas, it must provide that
information contemporaneously to all potential shippers, affiliated and
nonaffiliated, on its system.
* * * * *
PART 250--FORMS
1. The authority citation for part 250 continues to read as
follows:
Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.
2. In Sec. 250.16, paragraphs (a)(3), (c)(1), (c)(2) and (d)(1) are
revised to read as follows:
Sec. 250.16 Format of compliance plan for transportation services and
affiliate transactions.
(a) Who must comply. * * *
(3) Maintain all information required under this section from the
time the information is received until June 30, 1994.
* * * * *
(c) What to maintain. (1) An interstate pipeline must maintain the
information in paragraph (b)(2) of this section for all requests for
transportation services made by nonaffiliated shippers or in which a
nonaffiliated shipper is involved from the time the information is
received until June 30, 1994.
(2) The information required to be maintained by this section will
be available from September 12, 1988, and should be maintained
consistent with the requirements of Sec. 284.8(b)(4)(ii) of the
Commission's regulations.
* * * * *
(d) When to file. (1) The information in paragraph (b)(1) of this
section and entries in the log specified in paragraph (b)(2) of this
section relating to transportation requests for which transportation
has commenced 30 days or more previously, which have been denied, or
which have been pending for more than six months, must be filed
initially with the Commission by September 19, 1988, and thereafter as
required by paragraphs (d)(2) and (d)(4) until the earlier of: 90 days
after the Commission has determined that the pipeline is in full
compliance with the requirements of Order No. 636; or June 30, 1994.
This requirement applies to transportation service that commenced or
transportation requests that were denied after July 14, 1988, or that
were pending for six months or more on July 14, 1988.
* * * * *
[FR Doc. 94-32 Filed 1-3-94; 8:45 a.m.]
BILLING CODE 6717-01-P