[Federal Register Volume 81, Number 55 (Tuesday, March 22, 2016)]
[Rules and Regulations]
[Pages 15156-15159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06288]



Federal Energy Regulatory Commission

18 CFR Part 157

[Docket No. RM96-1-038]

Standards for Business Practices of Interstate Natural Gas 
Pipelines; Correction

AGENCY: Federal Energy Regulatory Commission.

ACTION: Correcting amendments.


SUMMARY: This document contains corrections to the final rule that was 
published in the Federal Register on Monday, November 2, 2015 (Order 
No. 587-W). These revisions correct an instruction error and reinstate 
the regulations describing the exhibits required to be attached to each 
certificate application by interstate natural gas pipelines. This 
document corrects that omission.

DATES: Effective March 22, 2016.

FOR FURTHER INFORMATION CONTACT: Gary D. Cohen (legal issues), Office 
of the General Counsel, Federal Energy Regulatory Commission, 888 First 
Street NE., Washington, DC 20426, Telephone: (202) 502-8321, Email: 
[email protected].

SUPPLEMENTARY INFORMATION: The Commission published a document in the 
Federal Register on Monday, November 2, 2015 (80 FR 67302), that 
omitted a portion of 18 CFR 157.14(a) describing the exhibits required 
to be submitted in certificate applications by interstate natural gas 
pipelines. This correction restores that text to the regulation. In 
addition, due to style requirements, 18 CFR 157.14(a)(6-a) has been 
redesignated as 157.14(a)(7) and subsequent provisions have been 
redesignated accordingly.

List of Subjects in 18 CFR Part 157

    Natural gas, Reporting and recordkeeping requirements.

    Dated: March 14, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission amends part 157, 
chapter I, title 18, Code of Federal Regulations, as follows.


1. The authority citation for part 157 continues to read as follows:

    Authority: 15 U.S.C. 717-717z.

2. Section 157.14 is amended by adding paragraphs (a)(1) through (19) 
to read as follows:

Sec.  157.14  Exhibits.

    (a) * * *
    (1) Exhibit A--Articles of incorporation and bylaws. If applicant 
is not an individual, a conformed copy of its articles of incorporation 
and bylaws, or other similar documents.
    (2) Exhibit B--State authorization. For each State where applicant 
is authorized to do business, a statement showing the date of 
authorization, the scope of the business applicant is authorized to 
carry on and all limitations, if any, including expiration dates and 
renewal obligations. A conformed copy of applicant's authorization to 
do business in each State affected shall be supplied upon request.
    (3) Exhibit C--Company officials. A list of the names and business 
addresses of applicant's officers and directors, or similar officials 
if applicant is not a corporation.
    (4) Exhibit D--Subsidiaries and affiliation. If applicant or any of 
its officers or directors, directly or indirectly, owns, controls, or 
holds with power to vote, 10 percent or more of the outstanding voting 
securities of any other person or organized group of persons engaged in 
production, transportation, distribution, or sale of natural gas, or of 
any person or organized group of persons engaged in the construction or 
financing of such enterprises or operations, a detailed explanation of 
each such relationship, including the percentage of voting strength 
represented by such ownership of securities. If any person or organized 
group of persons, directly or indirectly, owns, controls, or holds with 
power to vote, 10 percent or more of the outstanding voting securities 
of applicant--a detailed explanation of each such relationship.
    (5) Exhibit E--Other pending applications and filings. A list of 
other applications and filings under sections 1, 3, 4 and 7 of the 
Natural Gas Act filed by the applicant which are pending before the 
Commission at the time of the filing of an application and which 
directly and significantly affect the application filed, including an 
explanation of any material effect the grant or denial of those other 
applications and filings will have on the application and of any 
material effect the grant or denial of the application will have on 
those other applications and filings.
    (6) Exhibit F--Location of facilities. Unless shown on Exhibit G or 
elsewhere, a geographical map of suitable scale and detail showing, and 
appropriately differentiating between all of the facilities proposed to 
be constructed, acquired or abandoned and existing facilities of 
applicant, the operation or capacity of which will be directly affected 
by the proposed facilities or the facilities proposed to be abandoned. 
This map, or an additional map, shall clearly show the relationship of 
the new facilities to the applicant's overall system and shall include:
    (i) Location, length, and size of pipelines.
    (ii) Location and size (rated horsepower) of compressor stations.

[[Page 15157]]

    (iii) Location and designation of each point of connection of 
existing and proposed facilities with:
    (A) Main-line industrial customers, gas pipeline or distribution 
systems, showing towns and communities served and to be served at 
wholesale and retail, and
    (B) Gas-producing and storage fields, or other sources of gas 
    (7) Exhibit F-I--Environmental report. An environmental report as 
specified in Sec. Sec.  380.3 and 380.12 of this chapter. Applicant 
must submit all appropriate revisions to Exhibit F-I whenever route or 
site changes are filed. These revisions should identify the locations 
by mile post and describe all other specific differences resulting from 
the route or site changes, and should not simply provide revised totals 
for the resources affected.
    (8) Exhibit G--Flow diagrams showing daily design capacity and 
reflecting operation with and without proposed facilities added. A flow 
diagram showing daily design capacity and reflecting operating 
conditions with only existing facilities in operation. A second flow 
diagram showing daily design capacity and reflecting operating 
conditions with both proposed and existing facilities in operation. 
Both flow diagrams shall include the following for the portion of the 
system affected:
    (i) Diameter, wall thickness, and length of pipe installed and 
proposed to be installed and the diameter and wall thickness of the 
installed pipe to which connection is proposed.
    (ii) For each proposed new compressor station and existing station, 
the size, type and number of compressor units, horsepower required, 
horsepower installed and proposed to be installed, volume of gas to be 
used as fuel, suction and discharge pressures, and compression ratio.
    (iii) Pressures and volumes of gas at the main line inlet and 
outlet connections at each compressor station.
    (iv) Pressures and volumes of gas at each intake and take-off point 
and at the beginning and terminus of the existing and proposed 
facilities and at the intake or take-off point of the existing 
facilities to which the proposed facilities are to be connected.
    (9) Exhibit G-I--Flow diagrams reflecting maximum capabilities. If 
Exhibit G does not reflect the maximum deliveries which applicant's 
existing and proposed facilities would be capable of achieving under 
most favorable operating conditions with utilization of all facilities, 
include an additional diagram or diagrams to depict such maximum 
capabilities. If the horsepower, pipelines, or other facilities on the 
segment of applicant's system under consideration are not being fully 
utilized due, e.g., to capacity limitation of connecting facilities or 
because of the need for standby or spare equipment, the reason for such 
nonutilization shall be stated.
    (10) Exhibit G-II--Flow diagram data. Exhibits G and G-I shall be 
accompanied by a statement of engineering design data in explanation 
and support of the diagrams and the proposed project, setting forth:
    (i) Assumptions, bases, formulae, and methods used in the 
development and preparation of such diagrams and accompanying data.
    (ii) A description of the pipe and fittings to be installed, 
specifying the diameter, wall thickness, yield point, ultimate tensile 
strength, method of fabrication, and methods of testing proposed.
    (iii) When lines are looped, the length and size of the pipe in 
each loop.
    (iv) Type, capacity, and location of each natural gas storage field 
or facility, and of each dehydration, desulphurization, natural gas 
liquefaction, hydrocarbon extraction, or other similar plant or 
facility directly attached to the applicant's system, indicating which 
of such plants are owned or operated by applicant, and which by others, 
giving their names and addresses.
    (v) If the daily design capacity shown in Exhibit G is predicated 
upon an ability to meet each customer's maximum contract quantity on 
the same day, explain the reason for such coincidental peak-day design. 
If the design day capacity shown in Exhibit G is predicated upon an 
assumed diversity factor, state that factor and explain its derivation.
    (vi) The maximum allowable operating pressure of each proposed 
facility for which a certificate is requested, as permitted by the 
Department of Transportation's safety standards. The applicant shall 
certify that it will design, install, inspect, test, construct, 
operate, replace, and maintain the facilities for which a certificate 
is requested in accordance with Federal safety standards and plans for 
maintenance and inspection or shall certify that it has been granted a 
waiver of the requirements of the safety standards by the Department of 
Transportation in accordance with the provisions of section 3(e) of the 
Natural Gas Pipeline Safety Act of 1968. Pertinent details concerning 
the waiver shall be set forth.
    (11) Exhibit H--Total gas supply data. A statement by applicant 
    (i) Those production areas accessible to the proposed construction 
that contain sufficient existing or potential gas supplies for the 
proposed project; and
    (ii) How those production areas are connected to the proposed 
    (12) Exhibit I--Market data. A system-wide estimate of the volumes 
of gas to be delivered during each of the first 3 full years of 
operation of the proposed service, sale, or facilities and during the 
years when the proposed facilities are under construction, and actual 
data of like import for each of the 3 years next preceding the filing 
of the application, together with:
    (i) Names and locations of customer companies and municipalities, 
showing the number of residential, commercial, firm industrial, 
interruptible industrial, residential space-heating, commercial space-
heating, and other types of customers for each distribution system to 
be served at retail or wholesale; and the names and locations of each 
firm and interruptible direct industrial customer whose estimated 
consumption totals 10,000 Mcf or more in any calendar month or 100,000 
Mcf or more per year together with an explanation of the end use to 
which each of these industrial customers will put the gas.
    (ii) Applicant's total annual and peak day gas requirements by 
classification of service in paragraph (a)(11)(i) of this section, 
divided as follows: Gas requirements for each distribution area where 
gas is sold by applicant at retail; for each wholesale customer; for 
all main line direct industrial customers; and company use and 
unaccounted-for gas, for both the applicant and each wholesale 
    (iii) Total past and expected curtailments of service by the 
applicant and each wholesale customer proposing to receive new or 
additional supplies of gas from the project, all to be listed by the 
classifications of service in paragraph (a)(12)(i) of this section.
    (iv) Explanation and derivation of basic factors used in estimating 
future requirements, including, for example: Peak-day and annual 
degree-day deficiencies, annual load factors of applicant's system and 
of its deliveries to its proposed customers; individual consumer peak-
day and annual consumption factors for each class of consumers, with 
supporting historical data; forecasted saturation of space-heating as 
related to past experience; and full detail as to all other sources of 
gas supply available to applicant and to each of its customers, 
including manufacturing facilities and liquid petroleum gas.

[[Page 15158]]

    (v) Conformed copy of each contract, letter of intent or other 
agreement for sale or transportation of natural gas proposed by the 
application. Indicate the rate to be charged. If no agreements have 
been made, indicate the basis for assuming that contracts will be 
consummated and that service will be rendered under the terms 
contemplated in the application.
    (vi) A full description of all facilities, other than those covered 
by the application, necessary to provide service in the communities to 
be served, the estimated cost of such facilities, by whom they are to 
be constructed, and evidence of economic feasibility.
    (vii) A copy of each market survey made within the past three years 
for such markets as are to receive new or increased service from the 
project applied for.
    (viii) A statement showing the franchise rights of applicant or 
other person to distribute gas in each community in which service is 
    (ix) When an application requires a statement of total peak-day or 
annual market requirements of affiliates, whose operations are 
integrated with those of applicant, to demonstrate applicant's ability 
to provide the service proposed or to establish a gas supply, estimates 
and data required by this paragraph (a)(12)(ix) shall also be stated in 
like detail for such affiliates.
    (x) When the proposed project is for service which would not 
decrease the life index of the total system gas supply by more than one 
year, the data required in paragraphs (a)(12)(i) to (ix), inclusive, of 
this section need be submitted only as to the particular market to 
receive new or additional service.
    (13) Exhibit J--Federal authorizations. A statement identifying 
each Federal authorization that the proposal will require; the Federal 
agency or officer, or State agency or officer acting pursuant to 
delegated Federal authority, that will issue each required 
authorization; the date each request for authorization was submitted; 
why any request was not submitted and the date submission is expected; 
and the date by which final action on each Federal authorization has 
been requested or is expected.
    (14) Exhibit K--Cost of facilities. A detailed estimate of total 
capital cost of the proposed facilities for which application is made, 
showing cost of construction by operating units such as compressor 
stations, main pipelines, laterals, measuring and regulating stations, 
and separately stating the cost of right-of-way, damages, surveys, 
materials, labor, engineering and inspection, administrative overhead, 
fees for legal and other services, allowance for funds used during 
construction, and contingencies. Include a brief statement indicating 
the source of information used as the basis for the above estimate. If 
not otherwise set forth, submit data on preliminary bids, if any, for 
the proposed facilities and recent experienced cost data for facilities 
of similar character.
    (15) Exhibit L--Financing. Plans for financing the proposed 
facilities for which the application is filed, together with:
    (i) A description of the class (e.g., commercial paper, long-term 
debt, preferred stock) and cost rates for securities expected to be 
issued with construction period and post- operational sources of 
financing separately identified.
    (ii) Statement of anticipated cash flow, including provision during 
the period of construction and the first 3 full years of operation of 
proposed facilities for interest requirements, dividends, and capital 
    (iii) A balance sheet and income statement (12 months) of most 
recent data available.
    (iv) Comparative pro forma balance sheets and income statements for 
the period of construction and each of the first 3 full years of 
operation, giving effect to the proposed construction and proposed 
financing of the project.
    (v) Any additional data and information upon which applicant 
proposes to rely in showing the adequacy and availability of resources 
for financing its proposed project.
    (vi) In instances for which principal operations of the company 
have not commenced or where proposed rates for services are developed 
on an incremental basis, a brief statement explaining how the applicant 
will determine the actual allowance for funds used during construction 
(AFUDC) rate, or if a rate is not to be used, how the applicant will 
determine the actual amount of AFUDC to be capitalized as a component 
of construction cost, and why the method is appropriate under the 
    (16) Exhibit M--Construction, operation, and management. A concise 
statement setting forth arrangements for supervision, management, 
engineering, accounting, legal, or other similar service to be rendered 
in connection with the construction or operation of the project, if not 
to be performed by employees of applicant, including reference to any 
existing or contemplated agreements therefor, together with:
    (i) A statement showing affiliation between applicant and any 
parties to such agreements or arrangements. See Exhibit D, paragraph 
(a)(4) of this section.
    (ii) Conformed copies of all construction, engineering, management, 
and other similar service agreements or contracts in any way operative 
with respect to construction, operation, or financing of facilities 
which are the subject of the application or will be applicable under 
system operations.
    (17) Exhibit N--Revenues--Expenses--Income. When the estimated 
revenues and expenses related to a proposed facility will significantly 
affect the operating revenues or operating expenses of an applicant, 
there shall be submitted a system-wide statement for the last year 
preceding the proposed construction or service and pro forma system-
wide and incremental statements for each of the first three full years 
of operation of the proposed facilities, showing:
    (i) Gas system annual revenues and volumes of natural gas related 
thereto, subdivided by classes of service, and further subdivided by 
sales to direct industrial customers, sales to other gas utilities, and 
other sales, indicating billing quantities used for computing charges, 
e.g., actual demands, billing demands, volumes, heat-content adjustment 
or other determinants. In addition, if enlargement or extension of 
facilities is involved, the revenues attributable solely to the 
proposed facilities shall be stated separately, and the basis and data 
used in such computation shall be clearly shown.
    (ii) Gas system annual operating expenses classified in accordance 
with the Commission's Uniform System of Accounts for Natural Gas 
Companies; the annual depreciation, depletion, taxes, utility income, 
and resulting rate of return on net investment in gas plant including 
working capital. In addition if enlargement or extension of facilities 
is involved, the cost of service attributable solely to the proposed 
facilities shall be stated separately with supporting data.
    (iii) When the data required in paragraphs (a)(17)(i) and (ii) of 
this section is not submitted, applicant shall provide in lieu thereof 
a statement in sufficient detail to show clearly the effect on the 
operating revenues and operating expenses of the estimated revenues and 
expenses related to the proposed facility.
    (18) Exhibit O--Depreciation and depletion. Depreciation and 
depletion rates to be established, the method of determination and the 
justification therefor.
    (19) Exhibit P--Tariff. (i) A statement of the rates to be charged 
for the proposed sales or service, including:

[[Page 15159]]

    (A) Identification of the applicable presently effective rate 
schedules, when no additional tariff filings will be required, or
    (B) When changes are required in applicant's presently effective 
tariff, or if applicant has no tariff, pro forma copies of appropriate 
changes in or additions to the effective tariff or a pro forma copy of 
the new gas tariff proposed, or
    (C) When a new rate is proposed, a statement explaining the basis 
used in arriving at the proposed rate. Such statement shall clearly 
show whether such rate results from negotiation, cost-of-service 
determination, competitive factors or others, and shall give the nature 
of any studies which have been made in connection therewith.
    (ii) When new rates or changes in present rates are proposed or 
when the proposed facilities will result in a material change in 
applicant's average cost of service, such statement shall be 
accompanied by supporting data showing:
    (A) System cost of service for the first calendar year of operation 
after the proposed facilities are placed in service.
    (B) An allocation of such costs to each particular service 
classification, with the basis for each allocation clearly stated.
    (C) The proposed rate base and rate of return.
    (D) Gas operating expenses, segregated functionally by accounts.
    (E) Depletion and depreciation.
    (F) Taxes with the basis upon which computed.
* * * * *
[FR Doc. 2016-06288 Filed 3-21-16; 8:45 am]