Notices. Notice of intention to remove certain questions from proposed IPEDS survey
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BILLING CODE 3710-08-M\ DEPARTMENT OF EDUCATION Notice of Proposed Information Collection Requests AGENCY: Department of Education. ACTION: Notice of intention to remove certain questions from proposed IPEDS survey. SUMMARY: Under the Paperwork Reduction Act of 1995 (PRA), the Department of Education published on January 24, 2007, a Notice of Proposed Information Collection Requests in the **Federal Register** on Page 3119, Column 1 (72 FR 3119). That document invited public comment for a period of 60 days on the proposed information collection entitled, “Integrated Postsecondary Education Data System (IPEDS), Web-Based Collection System”.
The Department has received comments regarding some of the new questions included for the first time in this proposed IPEDS Information Collection Request (ICR). The Secretary has taken these comments into consideration and decided to revise the proposed collection by removing some of the new items proposed for this annual data collection. The Department will continue to take comment on the proposed IPEDS ICR during the remainder of the initial 60-day comment period and will post the revised IPEDS ICR on the Web site the Department uses to take comment.
The current proposed IPEDS ICR and the revised proposed IPEDS ICR are and will be available at *http://edicsweb.ed.gov* . After posting the revised ICR, the Department will publish the required second PRA notice, providing an opportunity for an additional 30-day public comment period. The IC Clearance Official, Regulatory Information Management Services, Office of Management, hereby issues this notice under the Paperwork Reduction Act of 1995. Dated: March 2, 2007. Angela C. Arrington, IC Clearance Official, Regulatory Information Management Services, Office of Management. [FR Doc.
E7-4108 Filed 3-7-07; 8:45 am] BILLING CODE 4000-01-P DEPARTMENT OF EDUCATION Smaller Learning Communities Program AGENCY: Office of Elementary and Secondary Education, Department of Education. ACTION: Notice of proposed priority, requirements, and selection criteria for fiscal year
(FY)2006 and subsequent years' funds. SUMMARY: The Deputy Secretary of Education proposes a priority, requirements, and selection criteria under the Smaller Learning Communities
(SLC)program. The Deputy Secretary will use the priority, requirements, and selection criteria, in addition to any other previously established priorities and requirements, for a competition using fiscal year
(FY)2006 funds and may use them in later years. We take this action to focus Federal financial assistance on an identified national need. We intend the priority, requirements, and selection criteria to enhance the effectiveness of SLC projects in improving academic achievement and the preparation of students for postsecondary education and careers. DATES: We must receive your comments on or before April 9, 2007. ADDRESSES: Address all comments about the proposed priority, requirements, and selection criteria to Gregory Dennis, U.S. Department of Education, 400 Maryland Avenue, SW., FB-6, room 3W243, Washington, DC 20202-6200. If you prefer to send your comments through the Internet, use the following address: *smallerlearningcommunities@ed.gov.* You must include the term “SLC Proposed Requirements” in the subject line of your electronic message. FOR FURTHER INFORMATION CONTACT: Gregory Dennis. Telephone:
(202)205-3784 or via Internet: *smallerlearningcommunities@ed.gov.* If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service
(FRS)at 1-800-877-8339. Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT . SUPPLEMENTARY INFORMATION: Invitation to Comment We invite you to submit comments regarding the proposed priority, requirements, and selection criteria. To ensure that your comments have maximum effect in developing the notice of final priority, requirements, and selection criteria, we urge you to identify clearly the specific proposed priority, requirement, or selection criterion that each comment addresses. We invite you to assist us in complying with the specific requirements of Executive Order 12866 and its overall requirement of reducing regulatory burden that might result from the proposed priority, requirements, and selection criteria. Please let us know of any further opportunities we should take to reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program. During and after the comment period, you may inspect all public comments about the proposed priority, requirements, and selection criteria at the U.S. Department of Education, FB6, room 3W243, 400 Maryland Avenue, SW., Washington, DC 20202 between the hours of 8:30 a.m. and 4 p.m., Eastern time, Monday through Friday of each week except Federal holidays. Assistance to Individuals With Disabilities in Reviewing the Rulemaking Record On request, we will supply an appropriate aid, such as a reader or print magnifier, to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for the proposed priority, requirements, and selection criteria. If you want to schedule an appointment for this type of aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT . General The SLC program is authorized under Title V, Part D, Subpart 4 of the Elementary and Secondary Education Act of 1965
(ESEA)(20 U.S.C. 7249), as amended by the No Child Left Behind Act of 2001. It awards discretionary grants to local educational agencies
(LEAs)to support the restructuring of large public high schools with enrollments of 1,000 or more students into smaller units. SLC structures include freshman academies, multi-grade academies organized around career interests or other themes, “houses” in which small groups of students remain together throughout high school, and autonomous schools-within-a-school. These structural changes are typically complemented by other personalization strategies, such as student advisories, family advocate systems, and mentoring programs. As used in this notice, the terms *smaller learning community,* *large high school,* and *BIA school* have the meanings assigned to them in the notice of final priority, requirements, definitions, and selection criteria
(NFP)for this program, published in the **Federal Register** on April 28, 2005 (70 FR 22233). Creating a more personalized learning experience for students has been a prominent part of high school improvement efforts in recent years, supported not only by the SLC program but also by States and private foundations. Several recently completed evaluations of SLCs have highlighted the strengths and limitations of these efforts. They have found, generally, that the implementation of SLCs and complementary personalization strategies can increase student attendance, reduce disruptive behavior, and create a more orderly environment for learning. However, these structural changes and personalization strategies, by themselves, do not appear to improve student academic achievement and readiness for postsecondary education and careers. Student learning gains have been seen only in those schools that also have made considerable changes in curriculum and instruction (Bernstein, et al., 2005; Kahne, Sporte, et al., 2006; Quint, 2006; Rhodes, Smerdon, 2005). Similarly, some large comprehensive high schools that have not implemented SLCs have significantly increased student achievement in reading or mathematics and narrowed achievement gaps by implementing more rigorous courses, providing extra support to struggling students, and systematically using data to improve instruction (ACT, Inc. and the Education Trust, 2005; Billig, Jaime, et al., 2005; National Center for Educational Accountability, 2005; Robinson, et al., 2005). This evidence suggests that SLCs are most likely to be successful in raising academic achievement and improving other student outcomes if their implementation is integrated closely with improvements in curriculum and instruction. As some reform advocates have argued persuasively, the focus of these efforts should be on achieving what most students and their parents now consider to be the core mission of the American high school: preparing all students to succeed in postsecondary education and careers without need for remediation (Roderick, 2006). Earning a bachelor's degree or higher is now the goal of an overwhelming majority of high school students, regardless of their race, gender, ethnicity, or family income. The percentage of high school sophomores who say they expect to earn a bachelor's degree or higher has nearly doubled over the last two decades, from 41 percent in 1980 to nearly 79 percent in 2002, with the largest increases occurring among American Indian and Alaskan Native, Hispanic, and low-income students. Another 11 percent of 2002 sophomores said they expected to earn an associate's degree or postsecondary certificate (National Center for Education Statistics, 2006). Yet too many young people do not receive the academic preparation, guidance, and support they need to achieve these ambitious aspirations. Many students lack a clear understanding of the academic requirements for entrance to postsecondary education, how to apply for postsecondary education, or options for financial aid (Horn and Chen, 2003; Horn and Nunez, 2000; and Kirst and Venezia, 2004). Most importantly, considerable numbers of young people are graduating from high school without the academic foundation needed to succeed in postsecondary education. According to the National Assessment of Educational Progress (NAEP), more than one-third of all high school seniors, and the majority of minority and low-income seniors, scored “below basic” in mathematics in 2000. Just 17 percent scored proficient or higher. Similarly, on the NAEP reading assessment in 2002, only about one-third of 12th graders demonstrated proficient or advanced reading skills, while the reading skills of one-quarter of high school seniors were “below basic.” Fewer than 22 percent of the high school graduates who took the ACT college-entrance examination in 2004 demonstrated readiness to do college-level work in core subjects such as mathematics, English, and science (ACT, Inc., 2005). Consequently, a significant number of students begin their postsecondary education by enrolling in one or more remedial reading, writing, or mathematics courses (NCES, 2004). Students who plan to enter the workforce immediately after high school, rather than pursue postsecondary education, also need a strong academic foundation. An emerging body of research indicates that the knowledge and skills needed to succeed in postsecondary education are comparable to those that employers expect from their entry-level workers (Achieve, Inc., 2004, 2005; ACT, Inc., 2006). Moreover, most students who decide initially that they do not want a postsecondary education and enter the workforce immediately after high school change their minds and decide within 18 months of high school graduation to pursue postsecondary education (Haimson, Deke, 2003). For these reasons, we are proposing a priority and selection criteria that are intended to promote the integration of SLC implementation with efforts to improve the preparation of all students for postsecondary education and careers without need for remediation. We also propose other requirements to clarify statutory provisions, facilitate the review of applications, and promote the equitable distribution of limited SLC grant funds. Discussion of Priority, Requirements, and Selection Criteria We will announce the final priority, requirements, and selection criteria in a notice in the **Federal Register** . We will determine the final priority, requirements, and selection criteria after considering responses to this notice and other information available to the Department. This notice does not preclude us from using additional priorities, requirements, definitions, and selection criteria, subject to meeting applicable rulemaking requirements. Note: This notice does not solicit applications. In any year in which we choose to use this priority, we invite applications through a notice in the **Federal Register** . When inviting applications we designate the priority as absolute, competitive preference, or invitational. The effect of each type of priority follows: *Absolute priority:* Under an absolute priority we consider only applications that meet the priority (34 CFR 75.105(c)(3)). *Competitive preference priority:* Under a competitive preference priority we give competitive preference to an application by either
(1)awarding additional points, depending on how well or the extent to which the application meets the competitive priority (34 CFR 75.105(c)(2)(i)); or
(2)selecting an application that meets the competitive priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)). *Invitational priority:* Under an invitational priority we are particularly interested in applications that meet the invitational priority. However, we do not give an application that meets the invitational priority a competitive or absolute preference over other applications (34 CFR 75.105(c)(1)). Priority Preparing All Students To Succeed in Postsecondary Education and Careers This proposed priority supports projects that create or expand SLCs that are part of a comprehensive effort to prepare all students to succeed in postsecondary education and careers without need for remediation. In order to meet this priority an applicant must demonstrate that, using SLC grant funds or other resources, it will:
(1)Provide intensive interventions to assist students who enter high school with reading/language arts or mathematics skills that are significantly below grade level to “catch up” quickly and attain proficiency by the end of 10th grade;
(2)Enroll students in a coherent sequence of rigorous English language arts, mathematics, and science courses that will equip them with the skills and content knowledge needed to succeed in postsecondary education and careers without need for remediation;
(3)Provide tutoring and other academic supports to help students succeed in rigorous academic courses;
(4)Deliver comprehensive guidance and academic advising to students and their parents that include assistance in selecting courses and planning a program of study that will provide the academic preparation needed to succeed in postsecondary education, early and ongoing college awareness and planning activities, and help in identifying and applying for financial aid for postsecondary education; and
(5)Increase opportunities for students to earn postsecondary credit through Advanced Placement courses, International Baccalaureate courses, or dual credit programs. Application Requirements Proposed Application Requirements The Secretary proposes the following application requirements for this SLC competition. These proposed requirements are in addition to the content that all SLC grant applicants must include in their applications as required by the program statute under Title V, Part D, Subpart 4, Section 5441(b) of the ESEA, and the application requirements we established in the NFP for this program, published in the **Federal Register** on April 28, 2005 (70 FR 22233) in the following areas: Eligibility; School Report Cards; Consortium Applications and Educational Service Agencies; Student Placement; Including All Students; and Evaluation. LEAs, including BIA schools and educational service agencies, applying on behalf of large public high schools, are eligible to apply for a grant. A discussion of each proposed application requirement follows. 1. Types of Grants We propose awarding implementation grants to applicants to support the creation or expansion of an SLC or SLCs within each targeted high school during the school year in which funds are first awarded. We do not propose funding any planning grants this year. Grants will be awarded for a period up to 60 months. We propose to require that applicants provide detailed, yearly budget information for the total grant period requested. At the time of the initial award, the Department will provide funds for the first 36 months of the performance period. Funding for the remaining 24 months will be contingent on the availability of funds and each grantee's substantial progress toward accomplishing the goals and objectives of the project as described in its approved application. Rationale Since the inception of the SLC program in 2000, the Department has awarded planning grants to more than 350 LEAs. Now, resources, planning tools, and research on SLCs and high school improvement strategies are much more prevalent and accessible for schools and LEAs than was the case at the outset of the SLC program. Therefore, the Department does not see a need to fund planning grants and, instead, intends to focus the SLC program on the actual implementation of projects to create or expand SLCs. 2. Budget Information for Determination of Award We propose that LEAs may receive, on behalf of a single school, up to $1,750,000, depending upon student enrollment in the school, during the 60-month project period. To ensure that sufficient funds are available to support awards to LEAs of all sizes, and not only the largest LEAs, we propose, as we have in previous years, to limit to 10 the number of schools that an LEA may include in a single application for a grant. LEAs applying on behalf of a group of eligible schools thus could receive up to $17,500,000 per grant. The following chart provides the ranges of awards per high school size that we are proposing: SLC Grant Award Ranges Student enrollment Award ranges per school 1,000-2,000 Students $1,000,000-$1,250,000 2,001-3,000 Students 1,000,000-1,500,000 3,001 and Up 1,000,000-1,750,000 The actual size of awards would be based on a number of factors, including the scope, quality, and comprehensiveness of the proposed project, and the range of awards indicated in the application. Applications that request more funds than the maximum amounts specified for any school or for the total grant would not be read as part of the regular application process. However, if, after the Secretary selects applications to be funded, it appears that additional funds remain available, the Secretary may choose to read those additional applications that requested funds exceeding the maximum amounts specified. If the Secretary chooses to fund any of those additional applications, applicants would be required to work with the Department to revise their proposed budgets to fit within the appropriate funding range. Rationale In previous SLC competitions, some applicants have requested more funds than the amount that we indicated would be available for a grant. Their applications included activities that could only be implemented if the applicants received a funding amount that exceeded the maximum amount specified in the notice. This strategy put at a competitive disadvantage other applicants that requested funds within the specified funding range and outlined a less extensive set of activities. For this reason, we propose to read initially only those applications that request an amount that does not exceed the maximum amounts specified for the grants. 3. Indirect Costs We propose to require eligible applicants who propose to use SLC grant funds for indirect costs to include, as part of their applications, a copy of their approved indirect cost agreement. Rationale The Department needs a copy of the approved indirect cost agreement to verify the accuracy of the amount of indirect costs for which an applicant is seeking to use SLC funds. 4. Performance Indicators We propose to require applicants to identify in their application specific performance indicators and annual performance objectives for each of these indicators. Specifically, we propose to require applicants to use the following performance indicators to measure the progress of each school:
(1)The percentage of students who score at or above the proficient level on the reading/language arts and mathematics assessments used by the State to determine whether a school has made adequate yearly progress under part A of Title I of the ESEA, as well as these percentages disaggregated by subject matter and the following subgroups:
(A)Major racial and ethnic groups;
(B)Students with disabilities;
(C)Students with limited English proficiency; and
(D)Economically disadvantaged students.
(2)The school's graduation rate, as defined in the State's approved accountability plan for Part A of Title I of the ESEA; and
(3)The percentage of graduates who enroll in postsecondary education in the semester following high school graduation. Applicants would be required to include in their applications baseline data for each of these indicators and identify performance objectives for each year of the project period. We further propose to require recipients of grant funds to report annually on the extent to which each school achieves its performance objectives for each indicator during the preceding school year. We propose to require grantees to include in these reports comparable data, if available, for the preceding three school years so that trends in performance will be more apparent. Rationale While creating SLCs can appeal to teachers, students, and parents for many reasons, their fundamental purpose is to improve academic achievement and student success after high school. Assistance provided under the SLC program should also support and enhance the efforts of LEAs and schools to fulfill the ambitious goals of the No Child Left Behind Act of 2001. For these reasons, it is important that projects measure their progress in improving student academic achievement and related outcomes. Two of the indicators we propose to use, student performance on reading/language arts and mathematics assessments and the graduation rate, are the same indicators used by States to measure the progress of LEAs and high schools under Part A of Title I of the ESEA. Performance objectives for these indicators should equal or exceed the annual measurable objectives established by the State in its approved accountability plan for Part A of Title I of the ESEA. Enrolling in postsecondary education is now a nearly universal aspiration among high school students and their parents. The third indicator we are proposing, entrance into postsecondary education in the semester following high school graduation, would measure the success of LEAs and schools in helping students achieve this goal. Performance objectives for this indicator should exceed the baseline level of performance and give particular emphasis to narrowing any gaps between students in general and economically disadvantaged students, students from major racial and ethnic groups, students with disabilities, and students with limited English proficiency. 5. Required Meetings Sponsored by the Department Applicants must set aside adequate funds within their proposed budget to send their project director to a two-day project directors' meeting in Washington, DC, in years one and two of the grant, and to send a team of five key staff members to attend a two-day regional institute in year one of the grant. The Department will host these meetings. Rationale Convening all project directors at an initial meeting enables Department staff to provide introductory information on grants administration and Department regulations, and other topics of interest to new grantees. The second project directors' meeting is intended to provide project directors an opportunity to take stock of their implementation progress and to share with their peers what they have learned, their success, and any challenges encountered in the first year of implementation. Project directors will have an opportunity to ask questions of one another and consult with technical assistance providers at this second meeting. Regional institutes in year one will provide grantee teams with technical assistance that will be useful in implementing their projects. Previous Grantees We propose to allow an LEA to apply only on behalf of a school or schools that will not receive funds through an SLC implementation grant that has a performance period that extends beyond the current fiscal year (September 30, 2007). Rationale Schools included in implementation grants that will be active after September 30, 2007 do not need additional assistance. Since the Department has received more applications for SLC grants than it has been able to fund in recent years, we believe that targeting new awards to LEAs that will assist high schools that are not included in grants that will be active after September 30, 2007 would be equitable and make the best use of limited program funds. Selection Criteria Proposed Selection Criteria We propose that the following selection criteria be used to evaluate applications for new grants under this program. We may apply these selection criteria to any SLC competition in the future. Need for the Project In determining the need for the proposed project, we will consider the magnitude of the need for the services that will be provided and the activities that will be carried out by the proposed project. Quality of the Project Design In determining the quality of the design of the proposed project, we will consider the extent to which—
(1)Teachers, school administrators, parents and community stakeholders support the proposed project and have been and will continue to be involved in its development and implementation;
(2)The applicant has carried out sufficient planning and preparatory activities to enable it to implement the proposed project during the school year in which the grant award will be made;
(3)School administrators, teachers, and other school employees will receive effective, ongoing technical assistance and support in implementing structural and instructional reforms;
(4)The applicant will offer all students a coherent sequence of rigorous English language arts, mathematics, and science courses that will provide students with the knowledge and skills needed to succeed in postsecondary education and careers without need for remediation; and
(5)The proposed project is part of a districtwide strategy for high school redesign and strengthens the district's capacity to develop and implement smaller learning communities and improve student academic achievement as part of that strategy. Quality of Project Services In determining the quality of the services to be provided by the proposed project, we will consider the extent to which the proposed project is likely to be effective in—
(1)Creating an environment in which a core group of teachers and other adults within the school know the needs, interests, and aspirations of each student well, closely monitor each student's progress, and provide the academic and other support each student needs to succeed;
(2)Equipping all students with the reading/English language arts, mathematics, and science knowledge and skills they need to succeed in postsecondary education and careers without need for remediation;
(3)Helping students who enter high school with reading/English language arts or mathematics skills that are significantly below grade-level “catch up” quickly and attain proficiency by the end of the 10th grade;
(4)Providing teachers with the professional development, coaching, regular opportunities for collaboration with peers, and other supports needed to implement a rigorous curriculum and provide high-quality instruction;
(5)Increasing the participation of students, particularly low-income students, in Advanced Placement, International Baccalaureate, or dual credit courses; and
(6)Increasing the percentage of students who enter postsecondary education in the semester following high school graduation. Support for Implementation In determining the adequacy of the support the applicant will provide for implementation of the proposed project, we will consider the extent to which—
(1)The management plan is likely to achieve the objectives of the proposed project on time and within budget and includes clearly defined responsibilities and detailed timelines and milestones for accomplishing project tasks;
(2)The project director and other key personnel are qualified to carry out their responsibilities, and their time commitments are appropriate and adequate to implement the SLC project effectively;
(3)The applicant will support the proposed project with funds provided under other Federal or State programs and local cash or in-kind resources; and
(4)The requested grant amount and the project costs are sufficient to attain project goals and reasonable in relation to the objectives and design of the project. Quality of the SLC Project Evaluation In determining the quality of the proposed project evaluation to be conducted by an independent, third-party evaluator, we consider the extent to which—
(1)The evaluation will provide timely, regular, and useful feedback to the LEA and the participating schools on the success and progress of implementation, and identify areas for needed improvement; and
(2)The independent evaluator is qualified to conduct the evaluation. Executive Order 12866 This notice of proposed priority, requirements, and selection criteria has been reviewed in accordance with Executive Order 12866. Under the terms of the order, we have assessed the potential costs and benefits of this regulatory action. The potential costs associated with this notice of proposed priority, requirements, and selection criteria are those resulting from statutory requirements and those we have determined as necessary for administering this program effectively and efficiently. In assessing the potential costs and benefits—both quantitative and qualitative—of this notice of proposed priority, requirements, definitions, and selection criteria, we have determined that the benefits of the proposed priority, requirements, and selection criteria justify the costs. We have also determined that this regulatory action does not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions. Elsewhere in this notice we discuss the potential costs and benefits of the proposed priority, requirements, and selection criteria under the following heading: Discussion of Priority, Requirements, and Selection Criteria. Paperwork Reduction Act of 1995
(PRA)Certain sections of the proposed priority, requirements, and selection criteria for the SLC grant program contain changes to information collection requirements already approved by the Office of Management and Budget
(OMB)under OMB control number 1810-0676 (1890-0001). We will be publishing a separate notice in the **Federal Register** requesting comments on these changes. Intergovernmental Review This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance. This document provides early notification of our specific plans and actions for this program. Electronic Access to This Document You may view this document, as well as all other Department of Education documents published in the **Federal Register** , in text or Adobe Portable Document Format
(PDF)on the Internet at the following site: *http://www.ed.gov/news/fedregister.* To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at
(202)512-1530. Note: The official version of this document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.html.* (Catalog of Federal Domestic Assistance Number 84.215L, Smaller Learning Communities Program.) Program Authority: 20 U.S.C. 7249. Dated: March 2, 2007. Raymond Simon, Deputy Secretary of Education Delegated the Authority to Perform the Functions of the Assistant Secretary for Elementary and Secondary Education. [FR Doc. E7-4228 Filed 3-7-07; 8:45 am] BILLING CODE 4000-01-P DEPARTMENT OF ENERGY [FE Docket No. 07-02-LNG] Office of Fossil Energy; ConocoPhillips Alaska Natural Gas Corporation and Marathon Oil Company; Application for Blanket Authorization To Export Liquefied Natural Gas AGENCY: Office of Fossil Energy, DOE. ACTION: Notice of application. SUMMARY: The Office of Fossil Energy
(FE)of the Department of Energy
(DOE)gives notice of receipt of an application filed jointly on January 10, 2007 by ConocoPhillips Alaska Natural Gas Corporation (CPANGC) and Marathon Oil Company (Marathon), requesting blanket authorization to export on their own behalf or as agents for others on a short-term or spot market basis from existing facilities near Kenai, Alaska up to 99 Trillion British thermal units (TBtu's) (approximately 99 Billion cubic feet (Bcf)) of liquefied natural gas
(LNG)to Japan and/or one or more countries on either side of the Pacific Rim over a two year period commencing April 1, 2009 and terminating March 31, 2011. The application is filed under section 3 of the Natural Gas Act (15 U.S.C. 717b), as amended by section 201 of the Energy Policy Act of 1992 (Pub. L. 102-486), and DOE Delegation Order No. 00-002.00G (Jan. 29, 2007) and DOE Redelegation Order No. 00-002.04C (Jan. 30, 2007). Protests, motions to intervene, notices of intervention, and written comments are invited. DATES: Protests, motions to intervene or notices of intervention, as applicable, requests for additional procedures, and written comments are to be filed at the address listed below no later than 4:30 p.m., eastern time, April 9, 2007. ADDRESSES: Office of Oil and Gas Global Security and Supply, Office of Fossil Energy, U.S. Department of Energy, Forrestal Building, Room 3E-042, FE-34, 1000 Independence Avenue, SW., Washington, DC 20585. FOR FURTHER INFORMATION CONTACT: Larine Moore or Beverly Howard, Office of Oil and Gas Global Security and Supply, Office of Fossil Energy, U.S. Department of Energy, Forrestal Building, Room 3E-042, FE-34, 1000 Independence Avenue, SW., Washington, DC 20585.
(202)586-9478;
(202)586-9387. Edward Myers, Office of the Assistant General Counsel for Fossil Energy and Energy Efficiency, U.S. Department of Energy, Forrestal Building, Room 6B-159, 1000 Independence Ave., SW., Washington, DC 20585.
(202)586-3397. SUPPLEMENTARY INFORMATION: Background CPANGC, a Delaware corporation with its principal place of business in Anchorage, Alaska, is a wholly-owned subsidiary of ConocoPhillips Company, a publicly traded Delaware corporation. Marathon is an Ohio corporation with its principal place of business in Houston, Texas. CPANGC and Marathon are not affiliated with each other. The applicants are joint indirect owners of natural gas liquefaction and marine terminal facilities near Kenai, Alaska (Kenai LNG Facility) on Cook Inlet in Southcentral Alaska. 1 1 The Kenai LNG Facility is owned by the Kenai LNG Corporation. CPANGC has a 70-percent ownership interest and Marathon has a 30-percent ownership interest in Kenai LNG Corporation. Existing Long-Term Authorization The applicants hold an existing long-term authorization to export LNG to Japan granted to CPANGC predecessor Phillips Petroleum Company (Phillips) and Marathon by the Federal Power Commission in 1967. 2 Phillips and Marathon were specifically authorized to export LNG from the State of Alaska to supply Tokyo Electric Power Company Inc. (Tokyo Electric) and Tokyo Gas Company Limited (Tokyo Gas) for a 15-year period terminating on May 31, 1984. The order also authorized Phillips and Marathon to construct the necessary liquefaction and marine terminal facilities in the Cook Inlet Basin near Kenai, Alaska. The long-term export authorization was subsequently amended and extended by the Economic Regulatory Administration
(ERA)at various times between 1982 and 1987. 3 2 See, *Phillips Alaska Natural Gas Corporation and Marathon Oil Company,* 37 FPC 777 (April 19, 1967). 3 See, DOE/ERA Opinion and Order No. 49 (1 ERA ¶ 70, 116, December 14, 1982) (extended export authority); DOE/ERA Opinion and Order No.49-A (1 ERA ¶“70,127, April 3, 1986) (transferred authorization from Phillips Petroleum Company to Phillips 66 Natural Gas Company); DOE/ERA Opinion and Order No. 206 (1 ERA ¶“70,128, November 16, 1987) (amended pricing formula). On July 28, 1988, ERA granted CPANGC, then known as Phillips 66 Natural Gas Company, and Marathon an extension of the long-term authorization to export LNG to Japan for a term of 15 years, ending March 31, 2004. FE subsequently approved amendments of the long-term authorization at various times between 1991 and 1995. 4 4 See, DOE/ERA Opinion and Order No. 261 (1 ERA ¶ 70,130, July 28, 1988) (extended export authority); DOE/FE Opinion and Order No. 261-A (1 FE ¶“70,454, June 18, 1991) (amended pricing formula); DOE/FE Opinion and Order No. 261-B (1 FE ¶70, 506, December 19, 1991) (transferred authorization from Phillips 66 Natural Gas Company to PANGC); DOE/FE Opinion and Order No. 261-C (1 FE ¶“70,607, July 15, 1992) (increased annual contract quantity from 52 trillion Btu's to 64.4 trillion Btu's—the provision for yearly sales up to 106 percent of annual contract quantity remained unchanged); DOE/FE Opinion and Order No. 261-D (1 FE ¶“71,087, March 2, 1995) (amended pricing formula); DOE/FE Opinion and Order No. 261-E (2 FE ¶ 71,429, July 18, 1997) (dismissed complaint). On April 2, 1999, in DOE/FE Order No. 1473, FE granted CPANGC predecessor Phillips Alaska Natural Gas Corporation (PANGC) and Marathon a further five-year extension of the long-term authorization to annually export up to 64.4 TBtu's of LNG to Japan commencing April 1, 2004 through March 31, 2009. 5 The commencement date proposed by the applicants for the blanket export authorization coincides with the anticipated termination of the applicants' currently effective long-term authorization issued in Order No. 1473. 5 See, *Phillips Alaska Natural Gas Corporation and Marathon Oil Company,* DOE/FE Opinion and Order No. 1473 (2 FE ¶ 70,317, April 2, 1999). On June 20, 2000, FE granted PANGC and Marathon approval of a revision in the pricing provisions of their Japanese sales contracts. 6 6 See, DOE/FE Opinion and Order No. 261-F (2 FE ¶ 70,506, June 20, 2000) (amended pricing provisions of Japanese sales contracts). Existing Blanket Authorization On April 10, 2000, in DOE/FE Order No. 1580, FE granted PANGC and Marathon blanket authorization to export up to 10 TBtu's (10 Bcf) of LNG from the Kenai LNG facility to international markets in the Pacific Rim over a two year period beginning on the date of the first export. 7 Although this blanket authorization was intended to supplement the long term authorization issued in DOE/FE Order No. 1473, the blanket authorization issued in DOE/FE Order No. 1580 has not been activated to date and no exports of LNG under this blanket authorization have been made. 7 See, *Phillips Alaska Natural Gas Corporation and Marathon Oil Company,* DOE/FE Opinion and Order No. 1580 (2 FE ¶ 70,472, April 10, 2000). Current Application In the instant application, the applicants initially requested that FE vacate the blanket authorization issued in DOE/FE Order No. 1580 contemporaneous with, and conditioned on, the issuance of the proposed blanket authorization sought in this application. However, by letter dated February 16, 2007, the applicants subsequently notified DOE that they are contemplating the activation of the blanket authorization issued in DOE/FE Order No. 1580. The applicants further state in the February 16 letter that if they activate the Order No. 1580 blanket authorization before the Department issues a favorable order in the instant proceeding, it will not be necessary for the Department to vacate the Order No. 1580 authorization. Alternatively, the applicants state that if the Department issues a favorable order herein before the applicants activate the Order No. 1580 authorization, then the applicants seek to reserve the ability to activate the Order No. 1580 authorization prior to the time period covered by the instant application. Public Interest Considerations In support of their application, CPANGC and Marathon state there is no regional need for the volume of LNG that they seek authority to export during the two year time period of the proposed authorization. The applicants commissioned separate studies by two independent consulting firms, Netherland, Sewell & Associates
(NSAI)and Resource Decisions (RD), to assist in determining the regional need for the natural gas proposed to be exported as LNG. The NSAI study evaluates natural gas reserves in the Cook Inlet region of Alaska and the RD study provides an analysis of the available supply and the effective demand for Cook Inlet natural gas during the term of the proposed blanket authorization. The RD study, in particular, postulates “Expected Cases” and “Stress Cases” for natural gas supply and demand in Southcentral Alaska in order to discern the possible impact of the export of LNG on regional need from 2006 through the first quarter of 2011. The applicants state the Expected Demand Case employs the most likely estimates for Southcentral Alaska natural gas demand and the Expected Supply Case employs the most likely estimates for Cook Inlet natural gas supply. The Stress Demand Case, on the other hand, reportedly employs regional natural gas demand assumptions that are higher than expected and the Stress Supply Case employs Cook Inlet natural gas supply assumptions that are lower than expected. The applicants project that under all of the analyzed scenarios, there are sufficient supplies of natural gas and other energy sources to meet both the regional demand of Southcentral Alaska and the foreign export market during the two year period of the proposed export authorization. 8 8 See Resource Decisions, Economic Analysis of Kenai LNG Export (January 2007) included as Appendix C to the application of CPANGC and Marathon filed January 10, 2007; and Netherland, Sewell & Associates report evaluating natural gas reserves in the Cook Inlet region of Alaska (January 4, 2007), included as Appendix D to the application of CPANGC and Marathon filed January 10, 2007. With respect to national need, CPANGC and Marathon state that shipment of LNG from the applicants' Kenai LNG facilities to the lower 48 states does not appear to be a viable option due to certain regulatory and economic hurdles. The applicants emphasize that the requirements of Section 27 of the Merchant Marine Act of 1920 (46 U.S.C. 883), commonly known as the Jones Act, would present a substantial regulatory hurdle. The applicants also emphasize that there are no existing U.S. west coast LNG receiving terminals and the cost of shipping Kenai LNG to U.S. east coast or Gulf Coast LNG receiving terminals would vastly exceed the cost of transporting the same LNG to Japan and/or another customer in the Pacific Rim due to the distances involved. The applicants assert that approval of the requested authorization to export Cook Inlet LNG from Kenai to Japan and/or one or more countries on either side of the Pacific Rim will provide tangible benefits to the Alaskan economy and to U.S. national interests. The applicants maintain that the Kenai LNG Facility provides a stable source of income and employment in Southcentral Alaska, an area noted for seasonal unemployment and a marked cyclical response to world oil price changes. The operation of the Kenai LNG Facility reportedly provides employment generating an estimated $15.9 million dollars in personal income. 9 The State of Alaska and its citizens also benefit from royalty payments on the LNG and from production and corporate income tax receipts. The applicants assert that a denial of the application will lead to the end of LNG exports from the Kenai LNG Facility by early 2009, resulting in a major loss in benefits to the State of Alaska. The applicants further assert that shutdown of the Kenai LNG Facility would cause a shut-in of the flowing gas supplies that would otherwise be produced from the Cook Inlet reservoirs and could result in permanent loss of natural gas reserves and deliverability. In this regard, the applicants maintain that once flowing wells are shut-in, there is no guarantee that those supplies will be available in the future at the same rate of production or that reserves will not be lost permanently. Finally, CPANGC and Marathon note the beneficial impact of the exportation of LNG on the balance of payments between the U.S. and Pacific Rim countries during the two year term of the proposed blanket authorization. 9 In 2005 dollars. DOE/FE Evaluation This export application will be reviewed pursuant to section 3 of the Natural Gas Act, as amended, and the authority contained in DOE Delegation Order No. 00-002.00G (Jan. 29, 2007) and DOE Redelegation Order No. 00-002.04C (Jan. 30, 2007). In reviewing LNG exports, DOE considers domestic need for the gas and any other issue determined to be appropriate, including whether the arrangement is consistent with DOE's policy of promoting competition in the marketplace by allowing commercial parties to freely negotiate their own trade arrangements. Parties that may oppose this application should comment in their responses on these issues. CPANGC and Marathon assert the proposed authorization is in the public interest. Under section 3 of the Natural Gas Act, as amended, an export from the United States to a foreign country must be authorized unless “the proposed exportation will not be consistent with the public interest.” Section 3 thus creates a statutory presumption in favor of approval of this application, and parties opposing the authorization bear the burden of overcoming this presumption. The National Environmental Policy Act (NEPA), 42 U.S.C. 4321 *et seq.* , requires DOE to give appropriate consideration to the environmental effects of its proposed decisions. No final decision will be issued in this proceeding until DOE has met its NEPA responsibilities. Public Comment Procedures In response to this notice, any person may file a protest, motion to intervene or notice of intervention, as applicable, and written comments. Any person wishing to become a party to the proceeding and to have their written comments considered as a basis for any decision on the application must file a motion to intervene or notice of intervention, as applicable. The filing of a protest with respect to the application will not serve to make the protestant a party to the proceeding, although protests and comments received from persons who are not parties will be considered in determining the appropriate action to be taken on the application. All protests, motions to intervene, notices of intervention, and written comments must meet the requirements specified by the regulations in 10 CFR part 590. Protests, motions to intervene, notices of intervention, requests for additional procedures, and written comments should be filed with the Office of Oil and Gas Global Security and Supply at the address listed above. A decisional record on the application will be developed through responses to this notice by parties, including the parties' written comments and replies thereto. Additional procedures will be used as necessary to achieve a complete understanding of the facts and issues. A party seeking intervention may request that additional procedures be provided, such as additional written comments, an oral presentation, a conference, or trial-type hearing. Any request to file additional written comments should explain why they are necessary. Any request for an oral presentation should identify the substantial question of fact, law, or policy at issue, show that it is material and relevant to a decision in the proceeding, and demonstrate why an oral presentation is needed. Any request for a conference should demonstrate why the conference would materially advance the proceeding. Any request for a trial-type hearing must show that there are factual issues genuinely in dispute that are relevant and material to a decision and that a trial-type hearing is necessary for a full and true disclosure of the facts. If an additional procedure is scheduled, notice will be provided to all parties. If no party requests additional procedures, a final opinion and order may be issued based on the official record, including the application and responses filed by parties pursuant to this notice, in accordance with 10 CFR 590.316. The application filed by CPANGC and Marathon is available for inspection and copying in the Office of Oil and Gas Global Security and Supply docket room, 3E-042, at the above address. The docket room is open between the hours of 8 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays. The application is also available electronically by going to the following Web address: *http://www.fe.doe.gov/programs/gasregulation/index.html* . Issued in Washington, DC, on March 2, 2007. Robert F. Corbin, Manager, Natural Gas Regulatory Activities, Office of Oil and Gas Global Security and Supply, Office of Fossil Energy. [FR Doc. E7-4162 Filed 3-7-07; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. RP00-632-022] Dominion Transmission, Inc.; Notice of Compliance Filing March 2, 2007. Take notice that on February 20, 2007, Dominion Transmission, Inc.
(DTI)tendered for filing its addendum to the 2006 informational fuel report filed with the Commission on June 30, 2006 in Docket No. RP00-632-021. Any person desiring to protest this filing must file in accordance with Rule 211 of the Commission's Rules of Practice and Procedure (18 CFR 385.211). Protests to this filing will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Such protests must be filed on or before the date as indicated below. Anyone filing a protest must serve a copy of that document on all the parties to the proceeding. The Commission encourages electronic submission of protests in lieu of paper using the “eFiling” link at *http://www.ferc.gov.* Persons unable to file electronically should submit an original and 14 copies of the protest to the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426. This filing is accessible on-line at *http://www.ferc.gov* , using the “eLibrary” link and is available for review in the Commission's Public Reference Room in Washington, DC. There is an “eSubscription” link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please e-mail *FERCOnlineSupport@ferc.gov* , or call
(866)208-3676 (toll free). For TTY, call
(202)502-8659. *Comment Date:* 5 p.m. Eastern Time on March 9, 2007. Magalie R. Salas, Secretary. [FR Doc. E7-4119 Filed 3-7-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Combined Notice of Filings #1 March 2, 2007. Take notice that the Commission received the following electric corporate filings: *Docket Numbers:* EC07-63-000. *Applicants:* Hardee Power Partners Limited. *Description:* Hardee Power Partners Limited submits a request for authorization for a transaction that would result in an indirect change in the upstream ownership. *Filed Date:* 02/27/2007. *Accession Number:* 20070301-0152. *Comment Date:* 5 p.m. Eastern Time on Tuesday, March 20, 2007. Take notice that the Commission received the following electric rate filings: *Docket Numbers:* ER98-411-014. *Applicants:* Wolverine Power Supply Cooperative, Inc. *Description:* Wolverine Power Supply Coop, Inc submits its third triennial market power analysis update. *Filed Date:* 02/26/2007. *Accession Number:* 20070301-0091. *Comment Date:* 5 p.m. Eastern Time on Monday, March 19, 2007. *Docket Numbers:* ER99-1005-007; ER05-1280-002; ER03-1079-008; ER02-47-007; ER02-1381-003; ER02-309-007. *Applicants:* Kansas City Power & Light Company; Strategic Energy, LLC; Aquila, Inc.; Aquila Long Term, Inc.; Aquila Merchant Services, Inc.; MEP Clarksdale Power, LLC. *Description:* Kansas City Power & Light Co and Strategic Energy, LLC submit a notification of Great Plains Energy Inc's pending acquisitions of Aquila and Aquila's MBR Entities. *Filed Date:* 02/26/2007. *Accession Number:* 20070301-0090. *Comment Date:* 5 p.m. Eastern Time on Monday, March 19, 2007. *Docket Numbers:* ER04-835-007; EL04-103-002. *Applicants:* California Independent System Operator Corporation. *Description:* California Independent System Operator Corp submits a compliance filing pursuant to FERC's 12/27/06 Order 492. *Filed Date:* 02/26/2007. *Accession Number:* 20070301-0088. *Comment Date:* 5 p.m. Eastern Time on Monday, March 19, 2007. *Docket Numbers:* ER07-572-000. *Applicants:* Alliant Energy Corporate Services, Inc. *Description:* Alliant Energy Corporate Services, Inc on behalf of Wisconsin and Light Co submits a Revised Master Power Supply Agreement with Great Lakes Utilities. *Filed Date:* 02/26/2007. *Accession Number:* 20070301-0087. *Comment Date:* 5 p.m. Eastern Time on Monday, March 19, 2007. *Docket Numbers:* ER07-573-000. *Applicants:* Ocean State Power. *Description:* Ocean State Power submits revisions to Rate Schedule FERC 1-4 and Rate Schedule FERC 5-8 to update the rate of return on equity. *Filed Date:* 02/26/2007. *Accession Number:* 20070301-0089. *Comment Date:* 5 p.m. Eastern Time on Monday, March 19, 2007. Take notice that the Commission received the following electric securities filings: *Docket Numbers:* ES07-25-000. *Applicants:* Upper Peninsula Power Company. *Description:* Upper Peninsula Power Company submits its Application for Renewed Authorization to Issue Securities Under Section 204 of the FPA. *Filed Date:* 02/28/2007. *Accession Number:* 20070228-5062. *Comment Date:* 5 p.m. Eastern Time on Wednesday, March 21, 2007. Any person desiring to intervene or to protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) on or before 5 p.m. Eastern time on the specified comment date. It is not necessary to separately intervene again in a subdocket related to a compliance filing if you have previously intervened in the same docket. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. In reference to filings initiating a new proceeding, interventions or protests submitted on or before the comment deadline need not be served on persons other than the Applicant. The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at *http://www.ferc.gov.* To facilitate electronic service, persons with Internet access who will eFile a document and/or be listed as a contact for an intervenor must create and validate an eRegistration account using the eRegistration link. Select the eFiling link to log on and submit the intervention or protests. Persons unable to file electronically should submit an original and 14 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First St., NE., Washington, DC 20426. The filings in the above proceedings are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed dockets(s). For assistance with any FERC Online service, please e-mail *FERCOnlineSupport@ferc.gov.* or call
(866)208-3676 (toll free). For TTY, call
(202)502-8659. Magalie R. Salas, Secretary. [FR Doc. E7-4118 Filed 3-7-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. CP07-25-000] Questar Pipeline Company; Notice of Availability of the Environmental Assessment for the Proposed Southern System Expansion Project II March 2, 2007. The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared an environmental assessment
(EA)on the natural gas pipeline facilities proposed by Questar Pipeline Company (Questar) in the above-referenced docket. This EA has been prepared in cooperation with the U.S. Department of Interior's, Bureau of Land Management, U.S. Geological Survey, and U.S. Fish and Wildlife Service (collectively, “cooperating agencies”). The EA was prepared to satisfy the requirements of the National Environmental Policy Act. The staff and cooperating agencies conclude that approval of the proposed project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment. The EA assesses the potential environmental effects of the construction and operation of the proposed Southern System Expansion Project II including: *Main Line 104 Extension Pipeline* —Consisting of about 53.9 miles of new 24-inch-diameter pipeline loop and ancillary facilities in Uintah, Duchesne and Carbon Counties, Utah. The new pipeline would loop Questar's existing Main Line 40 northeast of Price, Utah and include a pig launcher, four new mainline block valves, a 200-barrel slug catcher, cathodic protection systems, and associated crossover piping, taps, and valves. *Main Line 104 Loop Pipeline* —Consisting of about 4.7 miles of new 24-inch-diameter pipeline loop and ancillary facilities. The ML 104 Loop pipeline would parallel Questar's existing ML 104 between its existing Fausett Junction and Oak Spring Compressor Station facilities. *Blind Canyon Compressor Station Upgrades* —Consisting of upgrades to one of two existing compressor units. Additional proposed facility upgrades would include the installation of about 1,200 feet of new station suction and discharge piping, one pig launcher, one pig receiver, one block valve, one spillover valve, one ultrasonic gas meter, and one filter separator. *Oak Spring Compressor Station Upgrades* —Consisting of restaging two of the three existing compressor units. Additional proposed facility upgrades would include installation of one pig receiver, one block valve, and one valve associated with the pig receiver. *Price Yard Facilities* —Consisting of approximately 200 feet of inlet and outlet piping, a 200-barrel slug catcher, a filter separator, and associated valves that would be installed within the boundary of the existing facility site. The purpose of the Southern System Expansion Project II is to deliver up to approximately 175,000 dekatherms per day of natural gas on a firm basis from various receipt points on Questar's southern transmission system to a delivery point at an existing interconnect facility with the Kern River Gas Transmission Company pipeline near Goshen, Utah. The EA has been placed in the public files of the FERC. A limited number of copies of the EA are available for distribution and public inspection at: Federal Energy Regulatory Commission, Public Reference and Files Maintenance Branch, 888 First Street, NE., Room 2A, Washington, DC 20426,
(202)502-8371. Copies of the EA have been mailed to federal, state and local agencies, public interest groups, interested individuals, affected landowners, newspapers, and parties to this proceeding. Any person wishing to comment on the EA may do so. To ensure consideration prior to a Commission decision on the proposal, it is important that we receive your comments before the date specified below. Please note that the Commission strongly encourages electronic filing of any comments or interventions or protests to this proceeding. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site at *http://www.ferc.gov* under the “e-Filing” link and the link to the User's Guide. Before you can file comments you will need to create a free account which can be created by clicking on “Sign-up.” If you are filing written comments, please carefully follow these instructions to ensure that your comments are received in time and properly recorded: • Send an original and two copies of your comments to: Secretary, Federal Energy Regulatory Commission, 888 First St., NE., Room 1A, Washington, DC 20426. • Label one copy of the comments for the attention of the Gas Branch 3, PJ 11.3. • Reference Docket No. CP07-25-000; and • Mail your comments so that they will be received in Washington, DC on or before April 2, 2007. Comments will be considered by the Commission but will not serve to make the commentor a party to the proceeding. Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (18 CFR 385.214). 1 Only intervenors have the right to seek rehearing of the Commission's decision. 1 Interventions may also be filed electronically via the Internet in lieu of paper. See the previous discussion on filing comments electronically. Affected landowners and parties with environmental concerns may be granted intervenor status upon showing good cause by stating that they have a clear and direct interest in this proceeding which would not be adequately represented by any other parties. You do not need intervenor status to have your comments considered. Additional information about the project is available from the Commission's Office of External Affairs, at 1-866-208-FERC or on the FERC Internet Web site ( *www.ferc.gov* ) using the eLibrary link. Click on the eLibrary link, click on “General Search” and enter the docket number excluding the last three digits in the Docket Number field. Be sure you have selected an appropriate date range. For assistance, please contact FERC Online Support at *FercOnlineSupport@ferc.gov* or toll free at 1-866-208-3676, or for TTY, contact
(202)502-8659. The eLibrary link also provides access to the texts of formal documents issued by the Commission, such as orders, notices, and rulemakings. In addition, the Commission now offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries and direct links to the documents. Go to *www.ferc.gov/esubscribenow.htm* . Magalie R. Salas, Secretary. [FR Doc. E7-4121 Filed 3-7-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. CP06-442-000] UGI LNG, Inc.; Notice of Availability of the Environmental Assessment for the Temple LNG Plant March 2, 2007. The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared this Environmental Assessment
(EA)to discuss the environmental impacts involving the operation of facilities for the existing Temple LNG Plant proposed by UGI LNG, Inc. (UGI LNG) in the above referenced docket. The proposed project is located in Berks County, Pennsylvania. Because the Temple LNG Plant is an existing facility the EA focused on the operation of the proposed project, the cryogenic design aspects of the plant and public safety. This EA has been prepared to comply with the requirements of the National Environmental Policy Act (NEPA), the Council of Environmental Quality
(CEQ)regulations for implementing NEPA (Title 40, Code of Federal Regulations [CFR], sections 1500-1508), and the Commission's regulations (18 CFR 380). The staff concludes that approval of this proposal would not constitute a major Federal action significantly affecting the quality of the human environment. The EA has been placed in the public files of the FERC and is available for public inspection at: Federal Energy Regulatory Commission, Public Reference, 888 First Street, NE., Room 2A, Washington, DC 20426,
(202)502-8371. Copies of the EA have been mailed to federal, state and local agencies, public interest groups, interested individuals, affected landowners, newspapers, and parties to this proceeding. Any person wishing to comment on the EA may do so. To ensure consideration prior to a Commission decision on the proposal, it is important that we receive your comments before the date specified below. Please note that the Commission strongly encourages electronic filing of any comments or interventions or protests to this proceeding. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site at *http://www.ferc.gov* under the “e-Filing” link and the link to the User's Guide. Before you can file comments you will need to create a free account which can be created by clicking on “Sign-up.” If you are filing written comments, please carefully follow these instructions to ensure that your comments are received in time and properly recorded: • Send an original and two copies of your comments to: Secretary, Federal Energy Regulatory Commission, 888 First St., NE., Room 1A, Washington, DC 20426. • Label one copy of the comments for the attention of the Gas Branch 3, PJ 11.3. • Reference Docket No. CP06-442-000; and • Mail your comments so that they will be received in Washington, DC on or before April 2, 2007. Comments will be considered by the Commission but will not serve to make the commentor a party to the proceeding. Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (18 CFR 385.214). 1 Only intervenors have the right to seek rehearing of the Commission's decision. 1 Interventions may also be filed electronically via the Internet in lieu of paper. See the previous discussion on filing comments electronically. Affected landowners and parties with environmental concerns may be granted intervenor status upon showing good cause by stating that they have a clear and direct interest in this proceeding which would not be adequately represented by any other parties. You do not need intervenor status to have your comments considered. Additional information about the project is available from the Commission's Office of External Affairs, at 1-866-208-FERC or on the FERC Internet Web site ( *www.ferc.gov* ) using the eLibrary link. Click on the eLibrary link, click on “General Search” and enter the docket number excluding the last three digits in the Docket Number field. Be sure you have selected an appropriate date range. For assistance, please contact FERC Online Support at *FercOnlineSupport@ferc.gov* or toll free at 1-866-208-3676, or for TTY, contact
(202)502-8659. The eLibrary link also provides access to the texts of formal documents issued by the Commission, such as orders, notices, and rulemakings. In addition, the Commission now offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries and direct links to the documents. Go to *www.ferc.gov/esubscribenow.htm.* Magalie R. Salas, Secretary. [FR Doc. E7-4120 Filed 3-7-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Notice of Application for Non-Project Use of Project Lands and Waters and Soliciting Comments, Motions To Intervene, and Protests February 27, 2007. Take notice that the following application has been filed with the Commission and is available for public inspection: a. *Application Type:* Non-Project Use of Project Lands and Waters. b. *Project No.:* 349-121. c. *Date Filed:* December 19, 2006, and supplemented on February 21, 2007. d. *Applicant:* Alabama Power Company. e. *Name of Project:* Martin Dam Hydroelectric Project. f. *Location:* The project is located on Lake Martin in Elmore County, Alabama. g. *Filed Pursuant to:* Federal Power Act, 16 U.S.C. § §thnsp;791(a)-825(r) and § § 799 and 801. h. *Applicant Contact:* Mr. Keith E. Bryant, Senior Engineer; 600 18th Street North, Birmingham, AL 35203,
(205)257-1403. i. *FERC Contact:* Any questions on this notice should be addressed to Isis Johnson at
(202)502-6346, or by e-mail: *Isis.Johnson@ferc.gov.* j. *Deadline for filing comments and or motions:* March 27, 2007. All documents (original and eight copies) should be filed with: Secretary, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426. Please include the project number (P-349-121) on any comments or motions filed. Comments, protests, and interventions may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site under the “e-Filing” link. The Commission strongly encourages e-filings. k. *Description of Request:* Alabama Power Company, licensee for the Martin Dam Hydroelectric Project, has requested Commission approval to permit Anchor Bay Marina, LP to redevelop the facilities at Anchor Bay Marina on Lake Martin. The proposed redevelopment would include:
(1)Relocating three existing dock structures with a total of 51 slips;
(2)adding dry-stack storage for 144 boats;
(3)providing additional parking facilities;
(4)upgrading the existing boat showroom; and
(5)remodeling the existing sales office, restroom facilities, and restaurant. The dock structures would be moved across the bay to the eastern peninsula, along with their associated water, electricity and cable television lines. No new structures would be added to the lake. The proposal also includes the associated grading the east peninsula. Filter fabric and riprap would be used to stabilize the shoreline. All excess material would be transported to an inland spoil area outside the project boundary. The marina is located on the south shore of Kowaliga Bay, approximately three stream miles above Martin Dam in Elmore County, Alabama. l. *Location of the Application:* This filing is available for review at the Commission or may be viewed on the Commission's Web site at *http://www.ferc.gov,* using the “eLibrary” link. Enter the docket number excluding the last three digits in the docket number field to access the document. For assistance, contact FERC Online Support at *FERCOnlineSupport@ferc.gov* or toll- free at
(866)208-3676, or for TTY, contact
(202)502-8659. m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission. n. *Comments, Protests, or Motions to Intervene* —Anyone may submit comments, a protest, or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211, .214. In determining the appropriate action to take, the Commission will consider all protests or other comments filed, but only those who file a motion to intervene in accordance with the Commission's Rules may become a party to the proceeding. Any comments, protests, or motions to intervene must be received on or before the specified comment date for the particular application. o. *Filing and Service of Responsive Documents* —Any filings must bear in all capital letters the title “COMMENTS”, “RECOMMENDATIONS FOR TERMS AND CONDITIONS”, “PROTEST”, OR “MOTION TO INTERVENE”, as applicable, and the Project Number of the particular application to which the filing refers. A copy of any motion to intervene must also be served upon each representative of the Applicant specified in the particular application. p. *Agency Comments* —Federal, state, and local agencies are invited to file comments on the described applications. A copy of the applications may be obtained by agencies directly from the Applicant. If an agency does not file comments within the time specified for filing comments, it will be presumed to have no comments. One copy of an agency's comments must also be sent to the Applicant's representatives. Magalie R. Salas, Secretary. [FR Doc. E7-3968 Filed 3-7-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Notice of Application Accepted for Filing, Soliciting Motions To Intervene and Protests, Ready for Environmental Analysis, and Soliciting Comments, Recommendations, Terms and Conditions, and Fishway Prescriptions March 2, 2007. Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection. a. *Application Type:* Amendment of license to upgrade the installed capacity. b. *Project No.:* 2778-035. c. *Date Filed:* August 17, 2006. d. *Applicant:* Idaho Power Company. e. *Name of Project:* Shoshone Falls. f. *Location:* The project is located on the on the Snake River in Jerome and Twin Falls Counties, Idaho. Part of the project occupies lands owned by the Bureau of Land Management. g. *Filed Pursuant to:* Federal Power Act, 16 U.S.C. 791a-825r. h. *Applicant Contact:* Tom R. Saldin, Senior Vice President, Idaho Power Co., P.O. Box 70, Boise, Idaho 83707. Tel:
(208)388-2550. Also, Mr. Nathan F. Gardiner, Idaho Power Co., P.O. Box 70, Boise, Idaho 83707. Tel:
(208)388-2975. i. *FERC Contact:* Any questions on this notice should be addressed to Vedula Sarma at
(202)502-6190 or *vedula.sarma@ferc.gov* . j. Deadline for filing motions to intervene and protests, comments, recommendations, preliminary terms and conditions, and preliminary fishway prescriptions is 60 days from the issuance of this notice; reply comments are due 105 days from the issuance date of this notice. All documents (original and eight copies) should be filed with: Secretary, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426. The Commission's Rules of Practice require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency. Motions to intervene, protests, comments, recommendations, terms and conditions, and fishway prescriptions may be filed electronically via the Internet in lieu of paper. The Commission strongly encourages electronic filings. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site ( *http://www.ferc.gov* ) under the “e-Filing” link. k. This application has been accepted for filing and is ready for further environmental analysis. On February 27, 2007, Commission staff issued a draft environmental assessment to facilitate the generation of further analysis on the proposed project expansion. Idaho Power Company
(IPC)proposes to demolish a section of the Shoshone Falls powerhouse built in 1907 and containing two generating units 0.4 MW, and 0.6 MW and replace it with a new powerhouse containing a 50 MW generating unit. The project's authorized installed capacity would increase from 11,875 kilowatts
(kW)to 60,875 kW, and the hydraulic capacity would increase from 815 cubic feet per second
(cfs)to 4,815 cfs. The IPC also requests an extension of the license term for the project from 30 to 50 years. l. A copy of the application is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at *http://www.ferc.gov* using the “eLibrary” link. Enter the docket number excluding the last three digits in the docket number field to access the document. For assistance, contact FERC Online Support at *FERCOnlineSupport@ferc.gov* or toll-free at 1-866-208-3676, or for TTY, 202-502-8659. A copy is also available for inspection and reproduction at the address in item h above. Register online at *http://www.ferc.gov/esubscribenow.htm* to be notified via e-mail of new filings and issuances related to this or other pending projects. For assistance, contact FERC Online Support. m. Anyone may submit comments, a protest, or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211, .214. In determining the appropriate action to take, the Commission will consider all protests or other comments filed, but only those who file a motion to intervene in accordance with the Commission's Rules may become a party to the proceeding. Any comments, protests, or motions to intervene must be received on or before the specified comment date for the particular application. All filings must
(1)Bear in all capital letters the title “PROTEST”, “MOTION TO INTERVENE”, “COMMENTS,” “REPLY COMMENTS,” “RECOMMENDATIONS,” “ TERMS AND CONDITIONS,” or “ FISHWAY PRESCRIPTIONS;”
(2)set forth in the heading the name of the applicant and the project number of the application to which the filing responds;
(3)furnish the name, address, and telephone number of the person protesting or intervening; and
(4)otherwise comply with the requirements of 18 CFR 385.2001 through 385.2005. All comments, recommendations, terms and conditions or prescriptions must set forth their evidentiary basis and otherwise comply with the requirements of 18 CFR 4.34(b). All comments, recommendations, terms and conditions or prescriptions should relate to project works which are the subject of the license amendment. Agencies may obtain copies of the application directly from the applicant. A copy of any protest or motion to intervene must be served upon each representative of the applicant specified in the particular application. A copy of all other filings in reference to this application must be accompanied by proof of service on all persons listed in the service list prepared by the Commission in this proceeding, in accordance with 18 CFR 4.34(b) and 385.2010. n. An applicant must file no later than 60 days following the date of issuance of this notice of acceptance and ready for environmental analysis provided for in § 4.34(b)(5)(i):
(1)A copy of the water quality certification;
(2)a copy of the request for certification, including proof of the date on which the certifying agency received the request; or
(3)evidence of waiver of water quality certification. Magalie R. Salas, Secretary. [FR Doc. E7-4122 Filed 3-7-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. PL05-10-000] Criteria for Reassertion of Jurisdiction Over the Gathering Services of Natural Gas Company Affiliates February 15, 2007. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Order Terminating Proceeding and Clarifying Policy. SUMMARY: The Federal Energy Regulatory Commission is terminating the instant proceeding. The Commission also finds that it may only assert jurisdiction over a gathering provider affiliated with an interstate pipeline when the gatherer has used its market power over gathering to benefit the pipeline in its performance of jurisdictional transportation or sales service and that benefit is contrary to the Commission's policies concerning jurisdictional service adopted pursuant to the NGA. Further, the order clarifies that, where the gathering affiliate has engaged in the type of conduct described above as justifying an assertion of jurisdiction, the Commission need not also find “concerned action” between the pipeline and its gathering affiliate. FOR FURTHER INFORMATION CONTACT: Richard Howe, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8389. SUPPLEMENTARY INFORMATION: *Before Commissioners:* Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff. Order Terminating Proceeding and Clarifying Policy 1. In September 2005, the Commission issued a Notice of Inquiry
(NOI)1 to evaluate possible changes in the criteria set forth in *Arkla Gathering Service Co.* 2 for determining when the Commission may assert Natural Gas Act
(NGA)jurisdiction over the gathering activities of a gathering affiliate of a natural gas pipeline to guard against abusive practices by the affiliated companies. In *Arkla* , the Commission held that gathering affiliates of interstate pipelines are generally exempt from the Commission's NGA jurisdiction. However, the Commission also held that “if an affiliated gatherer acts in concert with its pipeline affiliate in connection with the transportation of gas in interstate commerce and in a manner that frustrates the Commission's effective regulation of the interstate pipeline, then the Commission may look through, or disregard, the separate corporate structures and treat the pipeline and gatherer as a single entity.” 3 1 112 FERC ¶ 61,292 (2005). 2 *Arkla Gathering Service Co.* , 67 FERC ¶ 61,257, at 61,871 (1994), *order on reh'g* , 69 FERC ¶ 61,280 (1994), *reh'g denied* , 70 FERC ¶ 61,079 (1995), *reconsideration denied* , 71 FERC ¶ 61,297
(1995)(collectively, *Arkla* ), *aff'd in part and reversed in part, Conoco Inc.* v. *FERC* , 90 F.3d 536 (D.C. Cir. 1996) ( *Conoco* ). 3 *Arkla* , 67 FERC at 61,871. 2. In *Williams Gas Processing* — *Gulf Coast Company, L.P.* v. *FERC* , 4 the United States Court of Appeals for the District of Columbia Circuit vacated and remanded Commission orders, in which the Commission had sought to reassert jurisdiction over certain affiliated gathering activities under the criteria set forth in *Arkla.* The court held that the Commission had not met its own test under *Arkla* for reassertion of jurisdiction. In light of the court's holding that the circumstances presented by the *Williams Gas Processing* case did not satisfy the *Arkla* test, the Commission determined to explore whether that test should be modified. To assist this reevaluation of the *Arkla* test, the Commission issued the NOI, asking parties to submit comments and respond to a number of specific questions. After carefully reviewing the comments, the Commission has determined not to change its current policies with respect to affiliated gatherers, although we do clarify the existing *Arkla* test. 4 *Williams Gas Processing-Gulf Coast Co., L.P.* v. *FERC,* 373 F.3d 1335 (D.C. Cir. 2004) ( *Williams Gas Processing* ). I. Statutory and Regulatory Backdrop 3. Section 1(b) of the NGA gives the Commission jurisdiction over
(1)transportation of natural gas in interstate commerce,
(2)sales in interstate commerce of natural gas for resale, 5 and “natural gas companies” 6 engaged in such transportation or sales. However, section 1(b) exempts “gathering of natural gas” from Commission jurisdiction. The Commission uses the “primary function” test to determine whether a facility is devoted to jurisdictional interstate transportation or non-jurisdictional gathering of natural gas. 7 Under that test, the Commission relies on various physical characteristics of the facilities to determine their jurisdictional status. 5 The Wellhead Decontrol Act of 1989 removed all first sales from Commission jurisdiction. 6 Section 2(6) of the NGA defines “natural-gas company ” as “a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.” 7 The Commission first articulated the primary function test in *Farmland Industries, Inc.* , 23 FERC ¶ 61,063 (1983). The Commission subsequently modified the test in *Amerada Hess Corp.* , 52 FERC ¶ 61,268 (1990). 4. Before Order No. 436, 8 interstate natural gas pipelines generally did not perform transportation-only or gathering-only services. Rather, they used all their facilities, including any gathering facilities they owned, to provide a bundled transportation and sale for resale service, for which they charged a single bundled rate. The United States Supreme Court held that the gathering exemption did not foreclose the Commission from reflecting “the production and gathering facilities of a natural gas company in the rate base and determining the expenses incident thereto for the purpose of determining the reasonableness of the [bundled] rates subject to its jurisdiction.” *Colorado Interstate Natural Gas Co.* v. *FPC* , 324 U.S. 581, 603 (1954). *See Conoco, Inc.* v. *FERC* , 90 F.3d 536, 545 (D.C. Cir. 1996). 8 *Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol* , Order No. 436, 50 Fed. Reg. 42,408 (Oct. 18, 1985), FERC Stats. & Regs. ¶ 30,665 at 31,554 (1985), *vacated and remanded, Associated Gas Distributors* v. *FERC* , 824 F.2d 981 (D.C. Cir. 1987), *cert. denied* , 485 U.S. 1006 (1988), *readopted on an interim basis* , Order No. 500, 52 FR 30,334 (Aug. 14, 1987), FERC Stats. & Regs. ¶ 30,761 (1987), *remanded, American Gas Ass'n* v. *FERC* , 888 F.2d 136 (D.C. Cir. 1989), *readopted* , Order No. 500-H, 54 FR 52,344 (Dec. 21, 1989), FERC Stats. & Regs. ¶ 30,867 (1989), *reh'g granted in part and denied in part* , Order No. 500-I, 55 FR 6,605 (Feb. 26, 1990), FERC Stats. & Regs. ¶ 30,880 (1990), *aff'd in part and remanded in part, American Gas Ass'n* v. *FERC* , 912 F.2d 1496 (D.C. Cir. 1990), *cert. denied* , 498 U.S. 1084 (1991). A. Order Nos. 436 and 636 5. In Order No. 436, the Commission initiated its open access transportation program, under which shippers can obtain a transportation-only service from the pipeline, and purchase their gas from third parties. As part of Order No. 436, the Commission adopted a regulation requiring that the rates for open access transportation service “separately identify cost components attributable to transportation, storage, and gathering costs.” 9 In *Northern Natural Gas Co.* , 10 a pipeline seeking authorization to perform open access transportation service stated that it intended to charge its customers separate rates for any gathering services it provided in connection with open access transportation service. However, the pipeline contended that NGA section 1(b) prevented the Commission from requiring those rates to be set forth in its tariff or determining the lawfulness of those rates. The Commission rejected this contention. 9 18 CFR 284.8 (d)(1) (1986). That regulation is now found at 18 CFR 284.10(c)(1) (2006). 10 43 FERC ¶ 61,473 (1988), *order on reh'g* , 44 FERC ¶ 61,384 (1988). (1988). 6. The Commission pointed out that NGA section 4(a) provides: All rates and charges made, demanded, or received by any natural gas company for *or in connection with* the transportation or sale of natural gas subject to the jurisdiction of the Commission, and all rules and regulations *affecting or pertaining to* such rates or charges, shall be just and reasonable [emphasis added]. 7. In addition, section 5(a) similarly provides that when the Commission finds that any rate charged by a natural gas company “in connection with” jurisdictional transportation or sales is unjust and unreasonable, or finds that any rule, regulation, or practice affecting such rate is unjust and unreasonable, the Commission may modify it. The Commission concluded that these provisions “require the Commission to determine the rates, rules, and regulations not only for the actual transportation or sales subject to the Commission's jurisdiction, but also for other services performed in connection with or ancillary to such transportation and sales,” 11 including gathering. The United States Court of Appeals for the Eighth Circuit affirmed this decision. 12 11 *Northern Natural Gas Co.* , 43 FERC at 62,160. 12 *Northern Natural Gas Co.* v. *FERC* , 929 F.2d 1261 (8th Cir. 1991). 8. When pipelines first implemented Order No. 436, they generally continued to bundle gathering service within their stand-alone open access transportation service. Thus, even though the pipelines separately identified their gathering costs in their rates for open access transportation service, shippers still had to purchase a bundled gathering/transportation service. However, in the 1989 Rate Design Policy Statement, 13 the Commission stated its preference for a full unbundling of gathering services from transportation, so that shippers would only pay for the services they actually used. 14 While Order No. 636 15 only mandated pipelines to unbundle their sales service from their transportation service, Order No. 636-A restated the Commission's strong preference for fully unbundled gathering services with separately charged rates, consistent with the Rate Design Policy Statement. 16 Ultimately, most pipelines with gathering facilities did unbundle their gathering services, either in their Order No. 636 restructuring proceedings or in rate cases. 17 13 *Interstate Natural Gas Pipeline Rate Design* , 47 FERC ¶ 61,295, at 62,059 (1989). 14 *See also Panhandle Eastern Pipeline Co.* , 57 FERC ¶ 61,264, at 61,840
(1991)(Opinion No. 369), *order on reh'g* , 59 FERC ¶ 61,244, at 61,853
(1992)(Opinion No. 369-A). 15 *Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation, and Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol* , Order No. 636, 57 FR 13,267 (Apr. 16, 1992), FERC Stats. and Regs. Regulations Preambles (January 1991-June 1996) ¶ 30,939 (Apr. 8, 1992), *order on reh'g* , Order No. 636-A., 57 FR 36,128 (Aug. 12, 1992), FERC Stats. and Regs. Regulations Preambles (January 1991-June 1996) ¶ 30,950 (Aug. 3, 1992), *order on reh'g* , Order No. 636-B, 57 FR 57,911 (Dec. 8, 1992), 61 FERC ¶ 61,272 (1992), *notice of denial of reh'g* , 62 FERC ¶ 61,007 (1993), *aff'd in part, vacated and remanded in part, United Dist. Cos.* v. *FERC* , 88 F.3d 1105 (D.C. Cir. 1996), order on remand, Order No. 636-C, 78 FERC ¶ 61,186 (1997). 16 16 Order No. 636-A, at 30,609. *See also El Paso Natural Gas Co.* , 60 FERC ¶ 61,109, at 61,353, 61,355 (1992), *order on reh'g* , 61 FERC ¶ 61,173, at 61,633-5 (1992). 17 *See, e.g.* , Opinion No. 369, 57 FERC at 61,841; Opinion No. 369-A, 59 FERC at 61,853; *Columbia Gas Transmission Corp.* , 64 FERC ¶ 61,060, at 61,517 (1993); *National Fuel Gas Supply Corp.* , 62 FERC ¶ 61,200, at 62,445 (1993). 9. In the Order No. 636 restructuring proceedings, the Commission continued to require pipelines performing gathering services to include a statement of their gathering rates in their tariff. The Commission also required that the pipeline's tariff include a statement that its gathering service is non-discriminatory, not unduly preferential, and not inconsistent with the terms and conditions applicable to its Part 284 open access service. However, the Commission did not further exercise its authority over the terms and conditions of gathering services by requiring such pipelines to include a full gathering rate schedule in their tariffs, similar to the separate rate schedules required for jurisdictional service such as firm and interruptible transportation service. 18 18 *Natural Gas Gathering Services Performed by Interstate Pipelines and Interstate Pipeline Affiliates—Issues Related to Rates and Terms and Conditions of Service* , 65 FERC ¶ 61,136, at 61,689 (1993); *Williams Natural Gas Co.* , 64 FERC ¶ 61,165, at 62,432 (1993). B. The Arkla Policy and Conoco Inc. v. FERC 10. In the aftermath of Order No. 636, a number of pipelines determined that it would be advantageous in the new regulatory environment either to “spin down” their gathering facilities to corporate affiliates or “spin off” the facilities to unrelated third parties. In February 1994, the Commission held a public conference to explore the issues raised by these filings. 19 After receiving written comments following the conference, the Commission determined to establish its policy concerning the spin down of gathering facilities to an affiliate of a natural gas company in the individual pending cases, including *Arkla* 20 and several companion orders issued the same day. 19 *Natural Gas Gathering Services Performed by Interstate Pipelines and Interstate Pipeline Affiliates—Issues Related to Rates and Terms and Conditions of Service* , 65 FERC ¶ 61,136 (1993). 20 67 FERC ¶ 61,257, *order on reh'g* , 69 FERC ¶ 61,280, *reh'g denied* , 70 FERC ¶ 61,079, *reconsideration denied* , 71 FERC ¶ 61,297, *aff'd in part and reversed in part, Conoco* , 90 F.3d 536. 11. First, the Commission addressed the issue of the extent of its jurisdiction to regulate the rates, terms, and conditions of gathering services performed by affiliates of natural gas companies. The Commission held that it generally lacks jurisdiction over affiliates that perform only a gathering service. The Commission recognized that the Eighth Circuit had confirmed in *Northern Natural* v. *FERC* , that under NGA sections 4 and 5 the Commission may regulate gathering services provided by “natural gas companies” “in connection with” their jurisdictional transportation services. However, the Commission pointed out that NGA section 2(6) defines a jurisdictional “natural gas company” as a person engaged in the transportation or natural gas in interstate commerce or the sales of such gas in interstate commerce for resale. Interstate pipelines are, of course, such natural gas companies. The Commission then held: However, companies that perform only a gathering function, whether they are independent or affiliated with an interstate pipeline, are not natural gas companies because they neither transport natural gas in interstate commerce, nor sell such gas in interstate commerce for resale. Therefore, the Commission does not have jurisdiction over such companies whether they are independent or affiliated with an interstate pipeline. 21 21 67 FERC at 61,871. The Commission also observed that, “although the Eighth Circuit's decision contained a footnote that might be construed to the contrary, the issue of whether the Commission has similar jurisdiction over pipeline-affiliated gatherers was not before that Court. We do not believe that sections 4 and 5 of the NGA nor the holding in *Northern* support the view that the Commission has jurisdiction over rates for gathering services that are `in connection with' interstate gas transportation if those services are not provided by a natural gas company.” *Id.* 12. Despite concluding that it generally lacked jurisdiction over affiliates performing only a gathering function, the Commission stated that it “can exert control over the gathering activities of affiliated gatherers in particular circumstances where such action is necessary to accomplish the Commission's policies for the transportation of natural gas in interstate commerce.” The Commission then set forth the following standard for asserting jurisdiction over an affiliated gatherer: If an affiliated gatherer acts in concert with its pipeline affiliate in connection with the transportation of gas in interstate commerce and in a manner that frustrates the Commission's effective regulation of the interstate pipeline, then the Commission may look through, or disregard, the separate corporate structures and treat the pipeline and gatherer as a single entity, *i.e.,* a single natural gas company. In so doing, the Commission would regulate the gathering activities as it would if the gathering facilities were owned directly by an interstate pipeline. 22 22 *Id.* 13. The Commission then further explained its standard for asserting jurisdiction as follows: The types of affiliate abuses which would trigger the Commission's authority to disregard the corporate form would be limited to abuses arising specifically from the interrelationship between the pipeline and its affiliate. That is, a complainant would have to allege that the pipeline would benefit by certain actions taken by the affiliate in conjunction with its affiliated pipeline. Such actions might include the affiliate's giving preferences to market affiliate gas or tying gathering service to the pipeline's jurisdictional transmission service; the pipeline's giving transportation discounts only to those utilizing the affiliate's gathering service; and actions resulting in cross-subsidization between the affiliate's gathering rates and the pipeline's transportation rates. Although an affiliate could undertake other types of anti-competitive activities, the Commission's jurisdiction would be implicated only where the abuse is directly related to the affiliate's unique relationship with an interstate pipeline. Except where the Commission finds that a pipeline and its gathering affiliate should be treated together as a single “natural gas company,” the affiliated gatherer would be subject to state, not Federal jurisdiction. 23 23 *Id.* 14. In *Arkla* , the Commission held that, in order to implement a proposal to spin down gathering facilities to an affiliate, the pipeline must file an application under NGA section 7(b) to abandon any of the gathering facilities for which it had received a certificate. In addition, the Commission held that, because the pipeline's termination of its gathering services was a change of service subject to the Commission's jurisdiction under NGA section 4, the pipeline must make a section 4 filing to terminate its gathering services for both the certificated and uncertificated facilities. 24 The Commission held that these filings would give it an opportunity to take several actions to protect shippers, in addition to its reservation of the right to assert jurisdiction over an affiliated gatherer in the circumstances discussed above. 24 *Arkla* , 69 FERC at 62,082-3. 15. First, the Commission stated it would require the pipeline to include non-discriminatory and equal access provisions in its tariff. 25 Second, as clarified on rehearing, the Commission required the pipeline to file a default gathering contract continuing existing rates for two years, which its affiliate had to offer to the pipeline's existing gathering customers. The Commission held that such a default contract was necessary to ensure continuity of service for the existing customers who had a reasonable expectation of a continuation of regulated service. Accordingly, without the default contract, the Commission could not find any section 7 abandonment or section 4 termination of service to be in the public interest and just and reasonable. 26 25 The required tariff provisions state that the pipeline:
(1)Will provide nondiscriminatory access to all sources of supply,
(2)will not give shippers of its gathering affiliate undue preferences over shippers of non affiliated gatherers, and
(3)will not condition or tie its agreement to provide transportation service to an agreement by the producer, customer, end-use or shipper relating to any service in which its gathering affiliate is involved. 26 *Arkla* , 69 FERC at 62,081-5. 16. In addition to the pipeline's filings to implement the spin-down, the entity acquiring the assets typically files a request for a declaratory order declaring that the facilities are non-jurisdictional gathering facilities. The Commission evaluates both those requests for declaratory orders and pipeline requests to abandon certificated gathering facilities pursuant to its primary function test. 17. In one of the companion orders to *Arkla* , the Commission held that, in determining whether to approve a spin down proposal, it would not consider whether the customers of spun down facilities would have competitive alternatives. 27 Rather, the Commission would approve spin down proposals, where application of the primary function test showed that the facilities were gathering, and the pipeline complied with the tariff language and default contract conditions. The Commission stated that, because the NGA does not give it jurisdiction to regulate affiliated gatherers, the existence or absence of competition is irrelevant to whether or not the Commission will regulate affiliated gatherers. The Commission pointed out that the comments filed in response to its notice revealed that “a significant part of the gathering industry, perhaps as much as 70 percent, is performed by unregulated independent gatherers,” and “many customers of such gatherers are captive to a single gatherer, *i.e.* , there is no competition for gathering services.” 28 Nevertheless, the NGA only authorizes the Commission to regulate gathering performed by natural gas companies, *i.e.* pipelines, in connection with jurisdictional transportation service. The Commission also found that the comments suggested that abuse of market power was not a significant problem, because customers of unregulated independent gatherers had found ways to prevent excessive rates 29 and there are various state and federal antitrust laws that could be invoked. The Commission concluded that the existence of competition is not particularly relevant to a decision to allow a pipeline to abandon its gathering facilities and, to the extent it was relevant, the excessive effort to assess it would be unwarranted where customers have recourse to other remedies. 27 *Mid Louisiana Gas Co.* , 67 FERC ¶ 61,255, at 61,850-1 (1994), *order on reh'g* , 69 FERC ¶ 61,303, at 62,168-9 (1994). 28 *Id.* at 61,851. 29 The Commission gave the example of gathering customers threatening to build bypass facilities. 18. The United States Court of Appeals for the District of Columbia Circuit reviewed the Commission's *Arkla* orders in *Conoco, Inc.* v. *FERC* , 90 F.3d 536 (D.C. Cir. 1996). The court affirmed the Commission's holding that it generally lacks jurisdiction over affiliates that perform only a gathering service and thus are not natural gas companies as defined in NGA section 2(6). The court stated, “Section 1(b) contemplates that some measure of authority over gathering should be reserved to the states, and jurisdiction over companies whose sole business is gathering is a permissible place to start.” 30 With regard to the Commission's reservation of the right to reassert jurisdiction in certain circumstances, the court stated: 30 *Conoco,* 90 F.3d at 547. As an abstract matter, we have no reason to doubt the Commission's conclusion that a non-jurisdictional entity could act in a manner that would change its status by enabling an affiliated interstate pipeline to manipulate access and costs of gathering. 31 31 *Id.* at 549. 19. However, the court stated that, because the Commission had not yet sought to exercise such authority, it could not speculate as the specific circumstances under which such a reassertion of authority would be justified. 20. The court reversed the Commission's requirement that the pipeline file a default contract as a condition for approval of a spin-down, finding that the Commission had not identified any source of authority to impose that condition. The court explained, Where an activity or entity falls within NGA § 1(b)'s exemption for gathering, the provisions of NGA §§ 4, 5, and 7, including the “in connection with” language of §§ 4 and 5, neither expand the Commission's jurisdiction nor override § 1(b)'s gathering exemption * * * Because the Commission concluded that the facilities to be transferred by NorAm Gas were exempt under § 1(b) as gathering facilities, and that NorAm Gas' independently operated affiliate gatherer was not a “natural gas company” subject to the NGA, the Commission cannot simply assert authority over the facilities and the affiliate by invoking other sections of the Act. 32 32 *Id.* at 553. C. OCSLA 21. Section 5(e) of the Outer Continental Shelf Lands Act (OCSLA) authorizes the Secretary of Interior to grant rights of way through submerged lands on the Outer Continental Shelf
(OCS)for purposes of transporting natural gas, upon the condition that the pipeline will transport natural gas produced in the vicinity of the pipelines in such proportionate amounts as the Commission, in consultation with the Secretary of Energy, may determine to be reasonable. Section 6(e)(1) provides that every permit, right-of-way, or other grant of transportation authority must require that the pipeline be operated in accordance with various competitive principles. These include that the pipeline must provide open and nondiscriminatory access to both owner and non-owner shippers. Section 6(e)(2) provides that the Commission may exempt pipelines that feed into a facility where gas is first collected from the required competitive principles of subparagraph 1. 22. In 2002, the Commission issued Order No. 639, 33 adopting regulations requiring companies providing natural gas transportation services, including gathering, on the OCS to periodically file information with the Commission concerning their pricing and service structures. The Commission relied on the OCSLA as providing the necessary authority for these regulations, and stated that the required information would assist it in determining whether OCS transportation services conform to the open access requirements of the OCSLA. In Order No. 639-A, the Commission recognized that it had generally relied only on the NGA to regulate offshore natural gas facilities and services. However, the Commission stated that, as offshore exploration and development had evolved, it had grown beyond our ability to regulate by relying exclusively on the NGA. The Commission further stated that approximately half of offshore gas infrastructure was now considered gathering and thus excluded from its NGA jurisdiction. In these circumstances, the new OCSLA reporting requirements were needed to ensure compliance with the OCSLA's competitive principles. 33 *Regulations under the Outer Continental Shelf Lands Act Governing the Movement of Natural Gas on Facilities on the Outer Continental Shelf* , Order No. 639, 65 FR 20,354 (Apr. 17, 2000), III FERC Stats. & Regs. ¶ 31,097 (2000), *order on reh'g* , Order No. 639-A, 65 FR 47,294 (Aug. 2, 2000), III FERC Stats. & Regs. ¶ 31,103 (2000), *order denying clarification* , 93 FERC ¶ 61,274 (2000). 23. In *Williams Companies* v. *FERC* , 345 F.3d 910 (D.C. Cir. 2003) ( *Williams Companies* ), the D.C. Circuit affirmed a District Court decision vacating the rules adopted by Order No. 639 as exceeding the Commission's authority under the OCSLA. The court held that the OCSLA does not provide the Commission a general power to enforce the OCSLA open access provisions, but only assigns the Commission a few well-defined tasks. When the Commission issues certificates pursuant to NGA section 7, it must include the open access conditions required by OCSLA section 6(f)(1). However, the court held that the OCSLA provided for the Secretary of Interior to enforce those conditions, not the Commission. D. Shell Offshore Inc. v. Transco and the Williams Gas Processing Remand 24. Transco filed an application for abandonment in which it proposed to spin-down roughly 22 miles of its North Padre Island pipeline facilities on the OCS, which were originally functionalized as transmission, to its affiliate, Williams Field Services (WFS). The application was accompanied by WFS's petition to declare the facilities gathering upon their acquisition by WFS. Over protests, the Commission approved the abandonment and granted the petition, declaring the facilities to be gathering upon completion of the sale, which occurred on December 1, 2001. 34 34 *Transcontinental Gas Pipe Line Corp.* , 96 FERC ¶ 61,115 (2001), *reh'g denied* , 103 FERC ¶ 61,177 (2003). 25. Prior to the spin-down Transco had charged Shell Offshore Inc. (Shell) $0.08/Dth to transport Shell's gas the 230-mile distance from the interconnect with Shell's production facilities to one of Transco's mainline pooling points. After the spin-down, Shell not only paid Transco the $0.08 transportation rate, WFS also demanded that it pay WFS an additional $0.08/Dth for transporting Shell's gas 3.08 miles from the connection with Shell's production facilities on what had become WFS's facilities to the interconnection with Transco's transmission facilities. Shell chose to shut in its production rather than pay double the rate it had been paying Transco alone for the same transportation service. 26. Shell filed a complaint against Transco and its affiliates, and the Commission set the complaint for hearing before an ALJ. In affirming the ALJ's Initial Decision, the Commission adopted the ALJ's finding that Transco and WFS, in effectuating the spin-down, met the *Arkla* test. Treating Transco and WFS as a single entity because of their concerted actions, the Commission found that their behavior frustrated the Commission's regulation of Transco by requiring Shell to execute a gathering agreement that included an exorbitant gathering rate and anticompetitive conditions, such as a life-of-reserves commitment tying Shell's production to the Transco facilities for the life of the reserves. The Commission also found that WFS's actions violated the OCSLA. The Commission then imposed a just and reasonable rate of $0.0169/Dth for gathering services on the spun-down North Padre facilities. 27. On rehearing, in attempting to rebuff arguments that the Commission did not properly apply the *Arkla* test, the Commission clarified that it viewed the *Arkla* test as being simply a circumvention test. That is, the Commission could reassert jurisdiction based on its finding that Transco created the “illusion of a separate gathering entity to evade the Commission's regulations,” thus permitting “WFS to extract money that Transco, as a natural gas company, providing both services alone, could not.” 35 The Commission denied requests for rehearing, describing the spin-down as “a sham * * * designed to circumvent the Commission's regulation.” 36 35 *Id.* at P 7. 36 103 FERC ¶ 61,177 at P 7. 28. WFS filed a petition for review of the Commission's orders 37 with the U.S. Court of Appeals for the District of Columbia. On July 13, 2004, the court vacated and remanded the Commission's orders in *Williams Gas Processing—Gulf Coast Company, L.P.* v. *FERC.* 38 The court rejected both of the Commission's statutory bases for reasserting jurisdiction—the NGA and the OCSLA. At the heart of the court's findings with respect to the Commission's NGA jurisdiction is its determination that the Commission misapplied the *Arkla* test. First, the court found that the Commission failed to show that the narrow kinds of abuses that would trigger a reassertion of jurisdiction had occurred. The court stated that *Arkla* permits a reassertion of jurisdiction in circumstances “limited to” abuses “directly related to the affiliate's unique relationship with an interstate pipeline,” such as “tying gathering service to the pipeline's jurisdictional transmission service,” or “cross-subsidization between the affiliate's gathering rates and the pipeline's transmission rates.” 39 Thus, under *Arkla* , the court found that “[o]nly those types of activities—where the affiliate is leveraging its relationship with the pipeline to enhance its market power—would ‘trigger the Commission's authority to disregard the corporate form and treat the pipeline and its affiliate as a single entity.’ ” 40 The court found that WFS's actions fell outside this category. The court found that the gathering affiliate's affiliation with the pipeline was “utterly irrelevant to its ability to charge high rates, or to impose onerous conditions for gathering service.” 41 Instead, the affiliate “could do these things for one reason only—because it was a recently deregulated monopolist in the North Padre gathering market.” 42 It observed that WFS was charging the same rates and service conditions that any non-affiliate gatherer could demand in the OCS and, thus, was not “leveraging” its unique relationship with Transco. 37 100 FERC ¶ 61,254 (2002), *reh'g denied* , 103 FERC ¶ 61,177 (2003). 38 *Williams Gas Processing* , 373 F.3d 1335. 39 *Id.* at 1342. 40 *Id.* ( *citing Arkla* , 67 FERC at 61,871). 41 *Id.* at 1342. 42 *Id.* 29. Second, the court found that the Commission, in piercing the corporate veil to treat WFS and Transco as a single entity in a “sham” transaction (the spin-down), analyzed the elements of the *Arkla* test out of sequence: “it adopts as its first premise (WFS is Transco) the *Arkla Gathering* test's ultimate conclusion—that corporate form may be set aside.” 43 Under *Arkla,* the rationale for reasserting “in connection with” jurisdiction is that the concerted behavior between the two entities ( *i.e.* , the regulated pipeline and the affiliated non-jurisdictional gathering affiliate) has frustrated the Commission's ability to regulate the *pipeline* (not the gatherer). By treating WFS and Transco as a single entity, the Commission “could thus attribute the gatherer's alleged malfeasance to the pipeline, and apply the pipeline's regulatory requirements to the gatherer.” 44 The court found error, because “Only when the Commission finds both concerted action between a jurisdictional pipeline and its gathering affiliate and that the concerted action frustrates the Commission's effective regulation of the pipeline, may it then pierce the corporate veil and treat the legally distinct entities as one.” 45 43 *Id.* at 1343. 44 *Id.* 45 *Id.* ( *citing Arkla* , 67 FERC at 61,871). 30. The court also rejected the Commission's finding that WFS' actions warranted application of the OCSLA's open access and nondiscrimination prohibitions to set a just and reasonable gathering rate. Describing an argument made on appeal that the Commission simply was enforcing the open access and non-discrimination conditions in Transco's tariff as *post hoc* rationalization, the court observed that the Commission's assertion of OCSLA jurisdiction over WFS based on the *Arkla* test “is nowhere present in either the Order or the Order on Rehearing.” 46 It left open for another day the broader question of whether the Commission may ever assert jurisdiction over gas gatherers, whether affiliated with a pipeline or not. 46 *Id.* at 1345. 31. On remand, the Commission found that, based on the record in the proceeding and the court's interpretation of the Commission's precedent, the Commission lacked sufficient basis to reassert NGA jurisdiction or to assert OCSLA jurisdiction over the gathering rates and services of WFS's North Padre Island gathering facilities. 47 On rehearing, Shell contended that the Commission should modify the *Arkla* test, and grant relief based on the revised test. The Commission denied rehearing on the ground that the case had been fully litigated based on the existing test. However, the Commission concurrently issued a notice of inquiry to evaluate possible changes in the *Arkla* test. Thirteen comments have been filed. The commenters include
(1)producers, 48
(2)providers of gathering services, and
(3)interstate pipelines. 49 No local distribution companies, state regulatory Commissions, or other representatives of natural gas consumers filed comments. 47 *Shell Offshore Inc.* v. *Transcontinental Gas Pipe Line Corp.* , 110 FERC ¶ 61,254, *order on reh'g* , 112 FERC ¶ 61,293 (2005). 48 The following producers submitted comments: Natural Gas Supply Association (NGSA); Independent Petroleum Association of America (IPAA); Producer Coalition (Producer Coalition); Shell Offshore, Inc. (Shell Offshore); and Indicated Shippers (Indicated Shippers). Indicated Shippers include: BPAmerica Production Company, BP Energy Company, ExxonMobil Gas & Power Marketing Company, Chevron U.S.A. Inc., Marathon Oil Company and Shell Offshore Inc). 49 The following gathering providers and/or pipelines submitted comments: Williams Midstream Gas and Liquids (Williams); ONEOK Field Services Company (ONEOK); Western Gas Resources, Inc. (Western); Duke Energy Field Services, Inc. (Duke); Enterprise Products Partners, L.P. (Enterprise); Enbridge Energy Partners, L.P. and Enbridge, Inc. (Enbridge); Williston Basin Interstate Pipeline Company (Williston); and Interstate Natural Gas Association of America (INGAA). II. Comments 32. Several of the producer commenters 50 contend that the Commission should modify the *Arkla* test so that the Commission can reassert jurisdiction when:
(a)the gatherer's facilities are connected to an affiliate's transportation facilities, and
(b)the gatherer frustrates the Commission's effective regulation of interstate transportation. They contend that such frustration may occur when the gathering affiliate charges an excessive price for gathering, since that effectively allows the corporate family to charge excessive rates for the entire transportation path, including over the pipeline itself. These producers further contend that there is a problem with offshore gathering notwithstanding the limited number of complaints to date. They assert that pipelines are waiting for final resolution of the Commission's jurisdiction. Spin-downs and spin-offs create the potential for abuse because they involve existing facilities; the customer does not have meaningful alternatives. 50 Shell Offshore and Indicated Shippers. 33. Other producer commenters recognize that the Commission has limited legal authority to reassert jurisdiction over gathering facilities that have been spun down to an affiliate or spun off to an independent company. 51 These commenters accordingly request that the Commission should review the potential for an abuse of market power when it considers a pipeline's request for abandonment of gathering facilities, rather than only considering whether the facilities are gathering facilities. These commenters also request that the Commission should redefine gathering so that fewer facilities qualify for the gathering exemption from Commission regulation. 51 Producer Coalition comments at 2-3, 10-11; IPAA comments at 2-3. 34. Gathering providers and pipelines contend that the Commission should retain the current *Arkla* test for reasserting jurisdiction. They argue that, as a legal matter, the Commission lacks jurisdiction to assert jurisdiction over gathering performed by non-natural gas companies except in the situation allowed by the current *Arkla* test. These commenters also state that there is no regulatory gap with respect to gathering. The states regulate gathering onshore and in state waters. OCS gathering is governed by the OCSLA and antitrust laws. In any event, they state that there is no industry-wide problem requiring a solution, since only a few complaints have been filed with the Commission. Moreover, they argue the current policy appropriately permits affiliated and non-affiliated gatherers to compete under the same regulatory structure. Also current commercial arrangements have been entered into based on the *Arkla* policy as it now stands. Re-regulation by the Commission would introduce regulatory risk and adversely affect investment in new infrastructure. The potential chilling of long-term commitments in gathering is not warranted given the relatively small number of spin-downs and the effectiveness of current regulation. III. Discussion 35. After carefully reviewing the comments, the Commission has determined to clarify the existing *Arkla* test in certain respects. However, consistent with the court's decision in *Williams Gas Processing* , an assertion that the gathering affiliate has charged too high a rate, by itself, would be insufficient to justify a reassertion of jurisdiction over the affiliate's gathering activities. A. The Arkla Test for Reasserting Jurisdiction 36. As the Commission held in *Arkla,* and the court affirmed in *Conoco,* the Commission generally lacks jurisdiction over affiliates of interstate pipelines that perform only a gathering service. However, the Commission has reserved the right to “exert jurisdiction over the [affiliate's] gathering service to the extent needed to preserve the Commission's statutory mandates under the NGA.” 52 The Commission has no doubt as to its authority to disregard corporate structures, including those created when a pipeline spins down its gathering facilities to a corporate affiliate, where necessary to prevent frustration of the statutory purpose of the NGA. 53 For example, in *Transcontinental Gas Pipe Line Corp.* v. *FERC (Transco)* , 54 the court upheld the Commission's order that found Transco had used affiliates to engage in a complicated scheme to
(1)make jurisdictional sales to non-captive customers at less than its filed rate, while
(2)passing through losses in those sales to its jurisdictional captive customers: “For the Commission not to have investigated further would frustrate a statutory purpose by allowing Transco to set up subsidiaries to sell gas at prices at which the company could not legally sell.” 55 52 *Arkla* , 69 FERC at 62,087. 53 *Capital Tel. Co.* v. *FCC* , 498 F.2d 734, 738, n.10 (D.C. Cir. 1974) (“[w]here the statutory purpose could be easily frustrated through the use of separate corporate entities a regulatory commission is entitled to look through the corporate entities and treat the separate entities as one for purposes of regulation.”). 54 998 F.2d 1313 (5th Cir. 1993). 55 *Id.* at 1321. 37. The issue here is what circumstances would require the Commission to exert jurisdiction over an affiliate's gathering activities in order to avoid frustration of the purposes of the NGA. In order to answer that question, it is first necessary to understand the relevant statutory purposes of the NGA, particularly what activities the Congress intended the Commission to regulate when it enacted the NGA. Therefore, the first section below discusses the extent to which the regulation of gathering may be considered to be within the statutory purposes of the NGA. We then clarify, in the next section, the type of conduct that would frustrate the NGA's statutory purposes, and thus justify a reassertion of jurisdiction. Finally, we consider the issues of whether a finding of “concerted action” between the affiliate and the pipeline is necessary to justify a reassertion of jurisdiction, and whether the affiliate's gathering activities must be conducted by separate personnel. 1. Statutory Purpose of the NGA 38. The statutory purpose of the NGA is, of course, “to protect consumers against exploitation at the hands of natural gas companies.” 56 In order to carry out that purpose, NGA section 1(b) gives the Commission jurisdiction to regulate:
(1)Transportation of natural gas in interstate commerce,
(2)sales for resale of natural gas in interstate commerce, 57 and
(3)“natural gas companies” engaged in such transportation and sales. This gives the Commission full authority to regulate the rates, terms, and conditions of jurisdictional transportation service performed by natural gas companies, *i.e.* interstate pipelines. If a natural gas company provides gathering service in addition to jurisdictional transportation service, the Commission's regulation of the jurisdictional transportation service “may necessarily impinge on” the gathering service if “gathering is intertwined with jurisdictional activities.” 58 For example, the Supreme Court has held that the Commission may consider a natural gas company's gathering costs “for the purpose of determining the reasonableness of rates subject to its jurisdiction.” 59 56 *FPC* v. *Hope Natural Gas Co.,* 320 U.S. 591, 610 (1944). 57 Excluding “first sales” deregulated by the Wellhead Decontrol Act of 1989. 58 *Conoco,* 90 F.3d at 549. 59 *Colorado Interstate Gas Co.,* 324 U.S. 581, 603 (1945). 39. However, the statutory purpose of the NGA does not include the regulation of gathering service, particularly by companies who are not natural gas companies. This follows from the fact that NGA section 1(b) expressly exempts “gathering of natural gas” from the Commission's jurisdiction. As the Supreme Court stated in *Northwest Central Pipeline* v. *State Corp. Commission,* 489 U.S. 493, 509-14 (1989), Congress in the NGA “carefully divided up regulatory power over the natural gas industry” so as to “expressly reserve to the States the power to regulate * * * gathering.” 40. Several of the producer commenters nevertheless argue that the provisions of NGA sections 4 and 5 permitting the Commission to determine rates for a natural gas company's services performed “in connection with” jurisdictional transportation and sales support a holding that the statutory purpose of the NGA includes ensuring that natural gas companies and their affiliates do not charge excessive rates for gathering. These commenters rely on the Eighth Circuit's holding in Northern Natural that the Commission “may * * * under the NGA's §§ 4 and 5 regulate rates charged for gathering on the pipeline's own gathering facilities in connection with jurisdictional interstate transportation, notwithstanding the explicit § 1(b) exclusion of gathering from the act.” 929 F.2d at 1269. In addition, they point out that the court defined the phrase “ ‘gathering facilities owned by the pipeline' and all subsequently similar expressions [used in its opinion] * * * to include such facilities owned or operated directly or indirectly by a pipeline or its parent, affiliate, subsidiary or lessors.” *Id* ., at 1263 n. 2. 41. However, in both *Arkla* and *Conoco,* the Commission and the D.C. Circuit rejected similar contentions that the Eighth Circuit's decision should be relied upon to find that the Commission has NGA sections 4 and 5 “in connection with” jurisdiction over gathering affiliates. For example, in *Conoco,* the D.C. Circuit pointed out that the gathering service at issue in *Northern Natural* was provided by the pipeline itself, not an affiliate, and thus the Eighth Circuit “did not have to consider the full ramifications of its footnote. It did not discuss the issue of the jurisdictional status of affiliate-run gathering services, and it thus provides little persuasive authority on that issue.” 90 F.3d, at 546. 42. While the Commission's regulation of a natural gas company's jurisdictional transportation services may necessarily impinge on any gathering services that company performs which are intertwined with its jurisdictional activities, the “in connection with” language of sections 4 and 5 does not constitute a grant of authority to the Commission to regulate gathering independent of its effect on jurisdictional transportation. The D.C. Circuit made this clear in *Conoco,* when it reversed *Arkla's* default contract condition. Arkla had required a pipeline spinning down gathering facilities to an affiliate to file a default contract offering the existing gathering customers service at existing rates for two years. The court rejected the Commission's argument that it could impose this condition pursuant to its section 4 authority to regulate non-jurisdictional activities performed “in connection with” jurisdictional service. The Commission had argued that permitting a pipeline to terminate its gathering services without adequate protection for its existing gathering customers would frustrate the Commission's policy, in its regulation of jurisdictional transportation service, to promote a competitive market. The court held that the statute forecloses interpreting the phrase “in connection with” in section 4 as permitting the Commission to regulate facilities which the Commission has expressly found to be outside its section 1(b) jurisdiction. 43. The court explained its decision as follows: Where an activity or entity falls within NGA section 1(b)'s exemption for gathering, the provisions of NGA §§ 4, 5, and 7, including the “in connection with” language of §§ 4 and 5, neither expand the Commission's jurisdiction nor override § 1(b)'s gathering exemption. In language no less applicable here, the Supreme Court held in *Panhandle III,* 337 U.S. at 508-09, that “sections 4, 5, and 7 do not concern the production or gathering, of natural gas; rather, they have reference to the interstate sale and transportation of gas and are so limited by their express terms. * * * Nothing in the sections indicates that the power given to the Commission over natural-gas companies by § 1(b) could have been intended to swallow all the exemptions of the same section, and thus extend the power of the Commission to the constitutional limit of congressional authority over commerce.” Because the Commission concluded that the facilities to be transferred by NorAm Gas were exempt under § 1(b) as gathering facilities, and that NorAm Gas' independently operated affiliated gatherer was not a “natural gas company” subject to the NGA, the Commission cannot simply assert authority over the facilities and the affiliate by invoking other sections of the act. 44. We recognize that Congress intended the NGA to be a comprehensive regulatory scheme, without any “attractive gaps.” 60 Given this purpose of the NGA, the Supreme Court has held that, in borderline cases, Commission jurisdiction may be found where necessary to avoid a regulatory gap. 61 In light of this rule of statutory construction, the Commission included in the NOI several questions designed to enable it to further review the extent to which regulation of gatherers affiliated with interstate pipelines may be justified as necessary to prevent a regulatory gap. 62 Upon review of those comments, we continue to find that the regulatory gap argument does not justify a finding that a purpose of the NGA is to enable the Commission to regulate gathering, particularly by non-natural gas companies, whether onshore or on the OCS. 60 *FPC* v. *Transcontinental Gas Pipe Line Corp.,* 365 U.S. 1, 28 (1961). 61 *FPC* v. *Louisiana Power & Light Co.,* 406 U.S. 621, 631 (1972). In *Conoco,* 90 F.3d at 553, the court found that the Commission had not supported its contention that a default contract was necessary to avoid a regulatory gap, finding that the Commission had not explained why the states would be unable to protect NorAm Gas Transmission Company's customers. 62 Question 11 asked, “Is there a gap between state regulation of gathering services and the Commission's regulation of natural gas companies, and, if so, what is the nature of that gap?” Question 12 asked, “Should the Commission view the conduct of offshore affiliated gatherers differently from onshore affiliated gatherers due to this lack of state regulation offshore?” 45. Onshore and in state waters, there is no regulatory gap, because the states have full authority to regulate gathering within their borders, including the rates charged by non-natural gas company gathering providers. As the court stated in *Conoco* , “Section 1(b) contemplates that some measure of authority over gathering should be reserved to the States, and jurisdiction over companies whose sole business is gathering is a permissible place to start.” 63 And, while states have not imposed across-the-board, cost-based rate regulations on local gatherers, they have imposed anti-discrimination requirements and permitted the filing of complaints by producers. 64 63 90 F.3d at 547. 64 *See* Enbridge comments at 26-30, summarizing how Texas, Louisiana, New Mexico, Wyoming, and Oklahoma regulate gathering. *See also* Enterprise comments at 16 and Williams comments at 24-25. 46. We recognize that states cannot regulate gathering on the OCS, since only the federal government has regulatory authority with respect to the OCS. 65 However, this does not justify a finding that a purpose of the NGA is to fill any regulatory gap with respect to the regulation of gathering on the OCS. NGA section 1(b) makes no distinction between the Commission's jurisdiction onshore and its jurisdiction on the OCS. Thus, given our holding that the purposes of the NGA do not include the regulation of gathering by non-natural gas companies onshore, there is no basis in the language of the NGA to make a different finding with respect to gathering by non-natural gas companies offshore. 65 Under the OCSLA, 43 U.S.C. 1331 *et seq.* (2000), it is “the policy of the United States that * * * the subsoil and seabed of the outer Continental Shelf appertain to the United States and are subject to its jurisdiction, control, and power of disposition * * * ” 43 U.S.C. 1332 (2000). However, while “ ‘[a]ll law applicable to the Outer Continental Shelf is federal law, [] to fill the substantial ‘gaps’ in the coverage of federal law, OCSLA borrows the ‘applicable and not inconsistent’ laws of the adjacent States as surrogate federal law.’ ” *Ten Taxpayer Citizens Group* v. *Cape Wind Associates,* 373 F.3d 183, 192 (1st Cir. 2004) (quoting *Gulf Offshore Co.* v. *Mobil Oil Corp.,* 453 U.S. 473, 480 (1981)). 47. We find that Congress determined how to address any regulatory gap with respect to gathering on the OCS in the OCSLA. When Congress first enacted the OCSLA in 1953, it recognized that there was no federal law applicable to the recovery of natural resources from the OCS. 66 At that time, Congress enacted only a “ ‘bare bones’ leasing authority with essentially no statutory standards or guidelines,” because there was a “relative lack of basic knowledge concerning, and interest in, development of the resources of the Shelf at that time.” 67 However, by the late 1970s, it was recognized that “the OCS represents such a large and promising area for oil and gas exploration,” that “Congress must update the [OCSLA] * * * to provide adequate authority and guidelines for the kind of development activity that probably will take place in the next few years.” 68 Accordingly, Congress amended the OCSLA in 1978 for this purpose. 66 For example, the House Committee on the Judiciary, which reported on H.R. 5134, the bill which was enacted in 1953 as the OCSLA, found that “no law [] exists whereby the Federal Government can lease those submerged lands [in the Outer Continental Shelf], * * * [] [T]herefore, [it is] the duty of the Congress to enact promptly a leasing policy for the purpose of encouraging the discovery and development of the oil potential of the Continental Shelf.” H.R. Rep. No. 413 (1953). 67 S. Rep. No. 95-284, at 48 (1977). 68 *Id.* 48. The OCSLA, unlike the NGA, contains no exemption for gathering, but applies to the full range of gas exploration, development, production, gathering, and transportation activities. One purpose of the 1978 OCSLA amendments was to assure that resources on the OCS are developed “in a manner which is consistent with the maintenance of competition.” 69 To that end, section 5(e) of the OCSLA authorizes the Secretary of the Interior to grant rights of way through submerged lands on the OCS for purposes of transporting natural gas, upon the condition that the pipeline will transport natural gas produced in the vicinity of the pipelines in such proportionate amounts as the Commission, in consultation with the Secretary of Energy, may determine to be reasonable. Section 5(f)(1) provides that every permit, right-of-way, or other grant of transportation authority must require that the pipeline be operated in accordance with various competitive principles. These include that the pipeline must provide open and nondiscriminatory access to both owner and non-owner shippers. 69 OCSLA section 3(3). 49. However, the D.C. Circuit held in *Williams Companies* v. *FERC* 70 that these sections do not give the Commission any general power to create and enforce open access on the OCS. Rather, Congress intended that the Secretary of the Interior have the general power to enforce these provisions, 71 with the Commission assigned only a few well-defined roles. One of those roles is to include in any certificates issued to an OCS pipeline pursuant to NGA section 7 the condition required by OCSLA section 5(f)(1). However, since our NGA section 7 certificate authority does not extend to gathering facilities, this provision cannot give us any jurisdiction with respect to OCS gathering. 72 70 345 F.3d 910 (D.C. Cir. 2003). 71 In addition, OCSLA section 23 authorizes citizens to commence civil actions to enforce any provision of the OCSLA. 72 In addition, OCSLA section 5(f)(2) permits the Commission to exempt from section (f)(1) competitive principles “any pipeline or class of pipelines which feeds into a facility where oil and gas are first collected, separated, dehydrated, or otherwise processed.” However, the court held in *Williams Companies* that “a provision allowing FERC to exempt a subset of facilities from section (f)(1)'s competitive principles is plainly not an authorization for it to adopt and enforce principles over all facilities.” 345 F.3d at 914. 50. In this order, we express no opinion on the extent of the Secretary of the Interior's authority under these provisions of the OCSLA to address assertions that a gatherer has abused its market power to charge unreasonably high prices. We hold only that Congress recognized in both 1953 when it first enacted the OCSLA and in 1978 when it amended that Act, that there was a regulatory gap on the OCS, and adopted the current provisions of the OCSLA for the express purpose of addressing that gap. In so doing, Congress did not amend the NGA to give this Commission any additional authority under that Act with respect to the OCS. We therefore conclude that the regulation of gathering on the OCS is no more within the purposes of the NGA than is the regulation of gathering onshore or in state waters. 73 73 In addition to the state and OCSLA regulation described above, gathering affiliates are also subject to federal and state anti-trust laws. For example, the Clayton Act, 15 U.S.C. 12-17 (2000), prohibits various anti-competitive activities. 2. Conduct Frustrating the Statutory Purpose 51. We now turn to the issue of the type of conduct that would frustrate the NGA's statutory purpose, and thus justify the Commission's disregarding the corporate form in order to exert jurisdiction over an affiliate's gathering service. For the reasons discussed below, the Commission finds that it may assert NGA sections 4 and 5 “in connection with” jurisdiction over the activities of an affiliated gatherer, when
(1)the gatherer has used its market power over gathering to benefit the pipeline in its performance of jurisdictional transportation or sales service and
(2)that benefit is contrary to the Commission's policies concerning jurisdictional services adopted pursuant to the NGA. However, the fact that an affiliated gatherer has abused its market power over gathering to benefit its own gathering service would not, by itself, justify an assertion of jurisdiction. 52. Examples of the types of conduct by an affiliated gatherer which could justify an assertion of jurisdiction include the following. An affiliated gatherer could refuse to provide gathering service or charge higher rates, unless the shipper also entered into a contract with the affiliated pipeline for long-term firm service, rather than short-term firm or interruptible transportation service. This could enable the pipeline to obtain more profitable contracts for its jurisdictional transportation service, than it otherwise could. That is because the Commission requires pipelines to accept a maximum rate bid for a short-term service, absent a higher net present value bid for a longer-term service. 74 Or, in situations where an affiliated, long-haul pipeline is interconnected with other interstate pipelines in the production area, the affiliated gatherer could refuse service or charge higher rates, unless the shipper also entered into a long-haul transportation contract with the affiliated pipeline for the entire haul to the market area, rather than using an unaffiliated interconnecting pipeline to reach the market area. This would similarly enable the pipeline to obtain a more profitable contract than it otherwise could, because, under the Commission's open access requirements, pipelines must accept maximum rate bids for short-haul service, absent a higher net present value bid for long-haul service. Such circumvention would frustrate the Commission's regulation of the pipeline's jurisdictional transportation service pursuant to the NGA. 74 *Northern Border Pipeline Co.,* 107 FERC ¶ 61,027, at P 11 (2004). 53. The above two examples of conduct justifying assertion of jurisdiction are both anti-competitive tying arrangements, 75 which, in the words of *Arkla* , are “directly related to the affiliate's unique relationship with an interstate pipeline.” 76 That is because the actions benefit the pipeline by enabling the pipeline to obtain more profitable contracts for its jurisdictional transportation service. The actions do not provide any direct benefit to the gathering affiliate's own business. Thus, absent the affiliation, a gatherer with market power would not appear to have an incentive to exercise its market power in such a manner. Such conduct would not increase the profitability of an independent gatherer's business. 75 As the court found in *Williams Gas Processing,* 374 F.3d at 1342, a tying arrangement is “conditioning the sale of a good or service on the purchase of another different (or tied) good or service.” In the above examples, the gathering affiliate would be conditioning sale of its gathering service on the purchase of a particular type of transportation service from the pipeline. 76 67 FERC at 61,871. 54. By contrast, a gathering affiliate's charging an unreasonably high rate for its gathering service, without more, does not frustrate the statutory purpose of the NGA and thus would not justify an assertion of jurisdiction. 77 This is true, even where the gathering affiliate owns gathering facilities that provide the sole link between a production field and the interstate pipeline. As already discussed, the statutory purpose of the NGA does not include the regulation of gathering service, particularly by companies who are not natural gas companies. Rather, the NGA only permits the Commission to affect gathering service to the extent necessary to carry out its responsibilities under the NGA to regulate jurisdictional services. A gathering affiliate's exercise of market power to charge high gathering prices may increase its own profits. But such an exercise of market power does not affect the Commission's regulation of jurisdictional transportation service. It does not permit the pipeline to circumvent any of the Commission's policies concerning jurisdictional transportation service or otherwise benefit the affiliated pipeline in its performance of jurisdictional transportation service. 77 *Contrast Transco,* 998 F.2d 1313, in which the court affirmed the Commission's assertion of jurisdiction where the use of corporate affiliates had enabled the pipeline to make jurisdictional sales at unduly discriminatory prices. 55. Thus, unlike the examples of conduct justifying an assertion of jurisdiction described above, there is simply no relationship between the gathering affiliate's relationship with the pipeline and its charging of high prices for gathering service. As now Chief Justice Roberts wrote in *Williams Gas Processing,* “The fact that WFS is an affiliate of Transco is utterly irrelevant to its ability to charge high rates, or to impose onerous conditions for gathering service. This irrelevance is demonstrated by the fact that WFS, as a deregulated monopolist, could have (and likely would have) undertaken the same course of conduct had Transco been owned by someone else entirely. The fact that WFS had an affiliate relationship with Transco neither enhanced nor detracted from its ability to charge high rates or impose onerous conditions.” 78 78 *Williams Gas Processing* , 373 F.3d at 1342. 56. When the Commission determined in *Arkla* that it lacks jurisdiction over non-natural gas companies performing gathering service including affiliates of pipelines, the Commission recognized that many customers of such gatherers are “captive * * * *i.e.* , there is no competition for gathering services.” 79 The Commission nevertheless held that the NGA only authorizes it to regulate gathering performed by natural gas companies in connection with jurisdictional services. Therefore, the Commission stated that “the absence of competition by itself is not sufficient to confer upon the Commission jurisdiction to regulate gathering by non-pipelines.” 80 It follows that a gathering affiliate's exercise of market power solely to charge high gathering prices does not violate the NGA's statutory purpose. 79 *Mid Louisiana Gas Co.,* 67 FERC at 61,851. 80 *Id.* 57. Producer commenters generally recognize that, in order to assert jurisdiction over an affiliated gatherer, the Commission must find that the gatherer has engaged in conduct that frustrates the statutory purpose of the NGA. For example, Shell Offshore proposes that the Commission modify the *Arkla* test “to provide that the Commission may assert jurisdiction over the gathering services on an affiliate of an interstate pipeline whenever the affiliate abuses its market power *and the abuses frustrate the effective regulation of the pipeline* as a consequence of any of the factors underlying the ‘in connection with’ relationship between the interstate transportation service and the gathering services.” 81 The producers argue that any abuse of market power by an affiliated gatherer, including simply charging excessive rates frustrates our regulation of the pipeline. That is because, as Shell Offshore argues, those excessive gathering rates “effectively exact monopolistic rents * * * over the entire combined service [of both the gatherer and the pipeline] nominally applying them solely to the gathering component.” 82 81 Shell Offshore comments at 41 (emphasis supplied). 82 *Id.* at 43. 58. In order to find a frustration of statutory purpose in the manner suggested by the producer commenters, the Commission would have to treat a gathering affiliate's charges in excess of a reasonable gathering rate as being additional charges for the pipeline affiliate's jurisdictional transportation service, rather than additional charges for the gathering affiliate's own service. However, this would effectively nullify the Commission's holding in *Arkla,* affirmed by the D.C. Circuit in *Conoco,* that the Commission lacks jurisdiction to regulate the rates charged by a gathering affiliate that performs only a gathering service. That is because whenever the gathering affiliate charged more than we determined was a reasonable rate for gathering service, we would treat the excess charge as a charge for jurisdictional transportation service and disallow it. This would have essentially the same effect as our directly regulating the rates charged for gathering by all affiliated gatherers. 59. Above, we have held that Congress reserved to the states jurisdiction to regulate gathering within their boundaries ( *i.e.* , onshore and in state waters) by non-natural gas companies, including affiliates of natural gas companies. Therefore, it is consistent with the statutory purpose of the NGA to allow the states to address any assertions that a non-natural gas company, whether or not affiliated with a pipeline, has charged excessive rates for gathering service within their boundaries. Similarly, we have held that Congress gave us no greater NGA authority with respect to OCS gathering, than over gathering onshore and in state waters, and has only provided for regulation of OCS gathering by non-natural gas companies under the OCSLA. The court has interpreted the OCSLA as giving the Department of the Interior, and not this Commission, the authority to enforce the non-discrimination and other requirements of the OCSLA. Therefore, we find it consistent with the purposes of the NGA and the OCSLA that a remedy, if any, for excess charges by non-natural gas companies for OCS gathering be provided by the Department of Interior, not us. 60. Finally, we emphasize that, if an interstate pipeline itself engages in anti-competitive conduct that favors its gathering affiliate, the Commission has full authority under the NGA to provide a remedy, without the need to assert jurisdiction over the affiliate. For example, if a pipeline seeks to subsidize its gathering affiliate by including costs properly allocated to the gathering affiliate in its interstate transportation rates, the Commission could order the removal of those costs. 83 Similarly, as described above, the Commission has required pipelines spinning down gathering service to an affiliate to include in their tariffs provisions stating that the pipeline
(1)will provide nondiscriminatory access to all sources of supply,
(2)will not give shippers of its gathering affiliate undue preferences over shippers of non affiliated gatherers, and
(3)will not condition or tie its agreement to provide transportation service to an agreement by the producer, customer, end-user or shipper relating to any service in which its gathering affiliate is involved. No pipeline has questioned our authority to impose these requirements. 83 *Colorado Interstate Gas Co.,* 324 U.S. 581, 603 (1945). 61. Thus, it is only when the gathering affiliate engages in anti-competitive conduct benefiting the pipeline, that the Commission must assert jurisdiction over the affiliate's activities in order to provide a remedy. In this regard, we note that in *Arkla* one of the examples we gave of activity that could justify a reassertion of jurisdiction was: “the pipeline's giving transportation discounts only to those utilizing the affiliate's gathering service.” We clarify that there would be no need to assert jurisdiction over the affiliate in this situation, since the Commission has authority under the NGA to remedy any undue discrimination in the pipeline's offering of discounts to its customers, without regard to its jurisdiction with respect to other companies who may benefit from those discounts. The appropriate example of activity that could justify exerting jurisdiction over the gathering affiliate in this context would be the reverse situation: where, as described above, the *gathering affiliate* gives gathering discounts only to those entering into particular types of contracts for the *pipeline's transportation service* that are beneficial to the pipeline. Similarly, any improper shifting of costs between a natural gas company and its gathering affiliate could be remedied in a proceeding to set the former's rates. 3. Whether Concerted Action Is Necessary 62. In *Arkla,* the Commission stated that it would reassert jurisdiction “if an affiliated gatherer acts in concert with its pipeline affiliate in connection with the transportation of gas in interstate commerce and in a manner that frustrates the Commission's effective regulation of the interstate pipeline.” This language has been interpreted as creating a two-pronged test under which the Commission must make separate findings that:
(1)the jurisdictional pipeline and its gathering affiliate have engaged in “concerted action” and
(2)the concerted action frustrates the Commission's ability to regulate the pipeline. 84 In the NOI, the Commission requested the parties' views on the need for the “concerted action” prong of the *Arkla* test. 85 84 *Williams Gas Processing,* 373 F.3d at 1343. 85 Question 8 asked, “Should a showing of ‘concerted action’ by the gathering affiliate and the pipeline be required, or should it be sufficient for the gathering affiliate alone to have engaged in anticompetitive or otherwise objectionable behavior to trigger the Commission's reassertion of jurisdiction?” Question 9 asked, “What kind of activities would constitute ‘concerted action’ between the gathering affiliate and its affiliated pipeline for purposes of circumventing the Commission's effective regulation of the pipeline?” 63. After evaluating the parties' comments on this issue, the Commission concludes that, in determining whether to assert jurisdiction over the activities of a gathering affiliate, the focus should be on whether the gathering affiliate has engaged in the type of conduct described in the previous section as justifying such an assertion of jurisdiction. While a finding that the pipeline also participated in the conduct may buttress the need for an assertion of jurisdiction over the activities of the gathering affiliate, we find, for the reasons discussed below, that a finding of such “concerted action” is not a necessary prerequisite to an assertion of jurisdiction. 64. The D.C. Circuit has held that “[w]here the statutory purpose could be easily frustrated through the use of separate corporate entities, the Commission is entitled to look through the corporate form and treat the separate entities as one and the same for purposes of regulation.” 86 Thus, the fundamental test for asserting jurisdiction over the activities of an affiliate is whether such jurisdiction is necessary to avoid frustration of the statutory purpose. When this test is met, the Commission may look through the corporate form, even though the separate corporations were formed in good faith, and there has been no showing that the corporate form was adopted for the purpose of evading the statute. 87 86 *Transco,* 998 F.2d at 1321 ( *quoting Capital Tel. Co.* v. *United States,* 449 F.2d 846, 855 (5th Cir. 1971)). 87 *Anderson* v. *Abbott,* 321 U.S. 349 (1944); *Kavanaugh* v. *Ford Motor Co.,* 353 F.2d 710 (7th Cir. 1965). 65. In the preceding section, the Commission has explained that, in order to justify an assertion of jurisdiction over the activities an affiliated gatherer, there must be a showing that the gatherer has engaged in conduct that frustrates the purpose of the NGA. This requires a showing that the gathering affiliate has abused its market power over gathering in order to benefit the pipeline in the pipeline's performance of jurisdictional transportation or sales service in a manner contrary to the Commission's policies concerning jurisdictional services. We believe that a showing of such conduct by the gathering affiliate is sufficient to show that Commission jurisdiction over the affiliate is necessary to avoid frustration of the NGA's purpose, regardless of whether there is also evidence of “concerted action” in the form of pipeline participation in the affiliate's conduct. 66. This conclusion may be illustrated by the examples the Commission gave in the previous section of conduct that would frustrate the purpose of the NGA. In those examples, the affiliated gatherer refuses to provide gathering service or charges higher rates, unless the shipper also enters into long-term or long-haul firm transportation contracts with the affiliated pipeline. Commission policy prohibits pipelines from demanding that their customers enter into such contracts. The “concerted action” prong of the existing *Arkla* test would prevent the Commission from asserting jurisdiction in this situation, unless there was evidence not only that the gathering affiliate had engaged in this activity, but also that the pipeline had participated in the activity sufficiently to justify a finding of “concerted action.” This would suggest that the Commission would have to find that the pipeline had requested the gathering affiliate to engage in the activity, or at least that the two affiliates had in some manner discussed or jointly planned the gathering affiliate's actions. 67. However, as discussed in the previous section, the gathering affiliate's actions would not provide any direct benefit to the gathering affiliate's own business. Rather, their sole purpose would appear to be to benefit the pipeline by enabling the pipeline to obtain more profitable contracts for its jurisdictional transportation service. If a gathering affiliate realizes on its own, without any consultation with the pipeline, that it can benefit the overall corporate family by requiring its customers to enter into contracts with the pipeline which the pipeline could not legally require, the purposes of the NGA have been frustrated just as much as if the two entities jointly planned the gathering affiliate's actions. Therefore, while every case must be decided based on the actual facts of that case, we will not exclude the possibility that situations could arise in which the Commission may assert jurisdiction over a gathering affiliate without a finding of “concerted action.” 68. By the same token, consistent with the court's decision in *Williams Gas Processing,* 88 a finding that the gathering affiliate and the pipeline have engaged in some form of “concerted action” would not, by itself, justify asserting jurisdiction over the activities of the gathering affiliate. There must be a finding of activity by the gathering affiliate that frustrates the Commission's ability to regulate the pipeline's jurisdictional service. Thus, concerted action between the two affiliates on matters that do not frustrate the purposes of the NGA, such as increasing the gathering affiliate's rates simply to make its gathering business more profitable, would not justify an assertion of jurisdiction. 88 373 F.3d at 1343. 4. Separate Operating Personnel 69. In the NOI, the Commission requested the parties' views on the extent to which a gathering affiliate must be separately staffed and otherwise independent of its pipeline affiliate in order to be considered exempt from the Commission's NGA jurisdiction. 89 Several gathering providers and pipelines assert that a requirement of separate staffing would increase the costs of providing gathering services. 90 Enbridge states that its OCS gathering and pipeline facilities were developed as coordinated projects, and must be operated in close coordination in order to deliver natural gas that meets the gas quality provisions of the pipeline and downstream markets. Enbridge states that it currently continues to realize economies of scale by using a single group of contract administrators and operations, scheduling, and gas control staff to operate its OCS pipelines and affiliated gatherers. 89 Question 3 asked, “What factors are relevant in determining whether a gathering affiliate is separate from its pipeline affiliate and independent from its pipeline affiliate in performing its gathering functions?” Question 4 asked, “Must a gathering affiliate be physically separate and separately staffed in order to be independent of its pipeline affiliate?” 90 Enbridge comments at 24-25; Enterprise comments at 13. 70. Some producers assert that the Commission should require that the gathering affiliate be separately staffed. 91 However, other producers also state that the relative degree of independence of the gathering affiliate from the pipeline should not be the issue when considering whether to assert jurisdiction over a gathering affiliate because of its abuse of market power; rather the focus should be whether there has been market power abuse, regardless of the extent to which the gathering affiliate operates independently. 92 91 *See, e.g.* , Producer Coalition comments at 2. 92 Indicated Shippers comments at 32; Shell Offshore comments at 57. 71. In Order No. 2004, 93 the Commission amended its standards of conduct in 18 CFR part 358 in order to apply them not only to marketing affiliates, but also to certain other “energy affiliates.” Order No. 2004 generally required natural gas pipeline transmission providers and their energy affiliates to function independently. 94 Order No. 2004 defined “energy affiliates” to include affiliates which are involved in transmission transactions in U.S. energy and transmission markets or which manage or control transmission capacity of the affiliated pipeline. 95 However, the Commission excluded gathering affiliates from the definition of energy affiliate if the gatherers only made incidental purchases or sales of *de minimus* volumes of natural gas to remain in balance under applicable pipeline tariff requirements and otherwise did not engage in energy affiliate activities such as managing the affiliated pipeline's transmission capacity. 96 93 *Standards of Conduct for Transmission Providers,* Order No. 2004, 68 FR 69,134 (Dec. 11, 2003), FERC Stats. & Regs., Regulations Preambles ¶ 31,155 (2003), *order on reh'g,* Order No. 2004-A, 69 FR 23,562 (Apr. 29, 2004), FERC Stats. & Regs., Regulations Preambles ¶ 31,161 (2004), *order on reh'g,* Order No. 2004-B, 69 FR 48,371 (Aug. 10, 2004), FERC Stats. & Regs., Regulations Preambles ¶ 31,118 (2004), *order on reh'g,* Order No. 2004-C, 70 FR 284 (Jan. 4, 2005), FERC Stats. & Regs., Regulations Preambles ¶ 31,325 (2004), *order on reh'g,* Order No. 2004-D, 110 FERC ¶ 61,320 (2005), *vacated and remanded as it applies to natural gas pipelines, National Fuel Gas Supply Corporation* v. *FERC,* 468 F.3d 831 (D.C. Cir. 2006). 94 18 CFR 358.4 (2006). 95 *See* 18 CFR 358.3(d)(1),
(2)and (6)(vi) (2006). 96 18 CFR 358.4(d)(6)(vi) (2006). 72. However, in *National Fuel Gas Supply Corp.* v. *FERC,* 468 F.3d 831 (D.C. Cir. 2006), the D.C. Circuit vacated Order No. 2004 as applied to natural gas pipelines and remanded the order to the Commission. The court stated that vertical integration between a pipeline and its affiliates should create efficiencies which benefit consumers, and therefore the Commission cannot impede such vertical integration without adequate justification. The court concluded that Order No. 2004 had failed to provide such a justification with respect to its application of the Standards of Conduct to the relationship between natural gas pipeline transmission providers and their non-marketing affiliates, *i.e.* , energy affiliates. 73. In response to the court's decision, the Commission issued an interim rule on January 9, 2007, 97 which among other things, provides that the standards of conduct will not govern the relationship between natural gas pipeline transmission providers and their energy affiliates. 98 Subsequently, on January 18, 2007, the Commission issued a Notice of Proposed Rulemaking, proposing to make this interim rule permanent. 99 Consistent with the interim rule, the Commission will not require that a gathering affiliate function independently of its natural gas pipeline affiliate in order to be considered exempt from the Commission's NGA jurisdiction. Any assertion of jurisdiction over the gathering affiliate will turn on whether the affiliate has engaged in the types of conduct described above as justifying such an assertion of jurisdiction, without regard to the relative independence of its employees. This finding is, of course, subject to the outcome of the Notice of Proposed Rulemaking concerning the Commission's Standards of Conduct. 97 *Standards of Conduct for Transmission Providers,* Order No. 690, 72 FR 2427 (Jan. 19, 2007), III FERC Stats. & Regs. ¶ 31,237 (2007). 98 *See* revised 18 CFR 358.1(e) (to be codified). 99 *Standards of Conduct for Transmission Providers, Notice of Proposed Rulemaking,* 72 FR 3,958 (Jan. 29, 2007), IV FERC Stats. & Regs. ¶ 32,611 (2007). B. The Primary Function Test 74. Although the NOI did not request comments on the Commission's primary function test, which is applied to determine whether facilities perform primarily a gathering or a transmission function, or on the extent to which the Commission may utilize its abandonment authority under NGA section 7(b) to find that reclassifying facilities from transmission to gathering is not consistent with the public interest based on economic grounds, some producer commenters offered their views on these subjects. We will briefly respond to these comments. 75. Regarding the primary function test, the commenters note that they expressed the same views in conjunction with the September 23, 2003 public conference in Docket No. AD03-13-000, convened to address whether the primary function test should be reformulated in light of perceived uncertainty in the application of the test to offshore facilities. 100 They note that although the Commission compiled a substantial record in that proceeding, it has not taken any further action, and urge that the Commission use the instant proceeding to address this issue. 100 *See Notice of Public Conference, Application of the Primary Function Test for Gathering on the Outer Continental Shelf* (Aug. 14, 2003) ( *NOI* ). This notice provides a comprehensive history of the development of the Commission's primary function test, particularly as it applied to offshore facilities. *See also, ExxonMobil Gas Marketing Co.* v. *FERC,* 297 F.3d 1071 (D.C. Cir. 2002), *cert. denied,* 540 U.S. 937
(2003)( *ExxonMobil* ) (providing a thorough history of the primary function test). 76. The commenters contend that the Commission should redefine gathering so that fewer facilities will qualify for the gathering exemption under the NGA. Although most commenters conclude that the Commission should continue to employ a physical-factor test to determine the primary function of facilities, they urge the Commission to give more emphasis to non-physical factors. Such factors would include the purpose, location, operation and ownership of a facility, as well as whether the jurisdictional determination is consistent with the objectives of the NGA and with the changing technical and geographic nature of offshore exploration and production. For example, one commenter suggests that an assessment of operational function would reveal whether the subject pipeline facility will continue to provide essentially the same service of moving gas from the wellhead or platform to the same downstream pipeline after it is reclassified. If so, a change in the jurisdictional classification would not be warranted. 77. Other commenters criticize what they perceive as the Commission's emphasis on the central point of aggregation prong of its physical test, arguing that the Commission should consider all factors in an individual case. 101 Another commenter suggests that when a pipeline seeks to reclassify a facility from transmission to gathering, there should be a presumption that the facility will continue to perform a transmission function unless the pipeline can demonstrate that the criteria of gathering are satisfied and that a change in jurisdictional status will not be economically detrimental to existing shippers on the facility who committed to service with the expectation that they could rely on Commission oversight. Under this view, the commenter opines, the Commission would not have to rely on its abandonment authority under section 7(b) of the NGA to find that a reclassification of a facility is inconsistent with the public interest, because the effect of the requested reclassification on shippers would be part of the test to determine jurisdiction. The commenters also point out that the courts have found that the Commission has great latitude or discretion when it determines what constitutes gathering and what constitutes transmission. 102 101 *See Sea Robin Pipeline Co.,* 87 FERC ¶ 61,384
(1999)( *Sea Robin* ), *order on reh'g,* 92 FERC ¶ 61,072 (2000), *aff'd, ExxonMobil,* 297 F.3d 1071 (D.C. Cir. 2002) (the Commission reformulated its primary function test to include a central point of aggregation prong for the primary function test when applied offshore, which was intended to be an analogue for the central-point-in-the field prong of the test which is applicable onshore, but is not dispositive offshore). 102 *Citing, ExxonMobil,* 297 F.3d 1071 (D.C. Cir. 2002) and *Williams Gas Processing—Gulf Coast Co.* v. *FERC,* 331 F.3d 1011 (D.C. Cir. 2003). 78. Another commenter offers an alternative to the primary function test which it calls the “platform test.” This approach would involve redefining “gathering” as the preparation of natural gas for the first stages of distribution, consistent with the Supreme Court's view in *Northern Natural Gas Co.* v. *State Corporate Commission,* 103 that gathering is “narrowly confined to the physical acts of drawing the gas from the earth and preparing it for the first stages of distribution.” 104 This commenter suggests that for offshore production, gathering would cease at, or just downstream of, the platform where the natural gas is first treated or prepared and made ready for delivery into a pipeline for transportation to shore. 103 372 U.S. 84 (1963). 104 *Id.* at 90. 79. In the NOI for the conference in Docket No. AD03-13-000, we acknowledged that [a]s with onshore facilities, the use of the primary function test, as modified by the policy statement for deepwater facilities, seems to be workable, and there has been relatively little controversy concerning its application in recent years. Efforts to apply the primary function test to offshore facilities in the shallow OCS, however, have been contentious. 105 105 *See NOI* at 4. 80. We solicited responses to specific questions from interested parties as well as any ideas for a new or further modified primary function test. We stated: [a] new test should ensure that similar facilities are subject to similar regulatory treatment. It should also provide incentives for investment in production, gathering, and transportation infrastructure offshore, without subjecting producers to the unregulated market power of third party transporters. Persons who appear at the conference should be prepared to indicate how the Commission's definition of gathering can be changed to achieve these goals. 106 106 *Id.* 81. Admittedly, that is a high standard for any new test to meet. Nevertheless, we see no point in disturbing the current regulatory regime unless doing so would result in a significant decrease in any inconsistent or uncertain results. In other words, replacing one test, which can be difficult to apply in many instances, with another test which would be equally, or perhaps more difficult to apply, would not achieve the desired goals that prompted us to issue the NOI in the first place. 82. We have not been persuaded by the comments and proposals submitted in Docket No. AD03-13-000, or by the comments proffered in this proceeding, that any new test would meet the above-described goals better than the current primary function test does. Nor are we convinced that we should depart from our practice of making jurisdictional findings on a case-by-case basis and relying, instead, on a more generic or “bright line” test, as some commenters propose. Moreover, as noted above, generally the current primary function test as applied to facilities located onshore and in deep water offshore has satisfied most interested parties. Thus, it may well be that similar results will be achieved as the Commission continues to make jurisdictional determinations for facilities located in shallow water by applying the current test on a case-by-case basis, making minor adjustments to the test or emphasizing different factors as circumstances evolve. Despite the fact that this approach may be more difficult and may sometimes produce uneven results, it is consistent with the guidance given to the Commission by the several courts that have reviewed the Commission's jurisdictional determinations under NGA section 1(b). 107 107 *See, e.g., ExxonMobil* , 297 F.3d at 1087; *Sea Robin Pipeline Co.* v. *FERC* , 127 F.3d 365, 370 (5th Cir. 1997); *Conoco* , 90 F.3d at 543. 83. Further, some commenters offer suggestions for a new approach to the primary function test that would run afoul of the courts' various admonishments regarding the Commission's responsibilities in making jurisdictional determinations. In addition, aspects of the Commission's current test which some commenters criticize have been upheld as reasonable by the courts. For example, with regard to the Commission's reliance on the central point of aggregation as a place where gathering ended and transportation began on some offshore facilities, the court in *ExxonMobil* stated that the central aggregation test is not a new, bright-line test, but rather is an amalgamation of physical factors, and in any event, is wholly consistent with past FERC precedent. It has long been the Commission's view, upheld by this Court, among others, that when gas from separate wells is collected by several lines which converge at a single location in the producing field for delivery into a single line for transportation, the separate lateral lines behind the central point are classified as non-jurisdictional gathering facilities. 108 108 *ExxonMobil* , 297 F.3d at 1085. 84. Obviously, where there is no such point on facilities, this prong of the primary function test would not apply, and other factors of the test would dictate the jurisdictional outcome. Thus, the “platform test” suggestion would establish a bright line test that would limit our ability to look at the other factors that may be relevant. 109 109 “The Fifth Circuit concluded that FERC had 'reverted to its single factor, bright-line approach that it had previously rejected as unworkable for offshore pipelines,' ” ( *ExxonMobil* , 297 F.3d at 1079, *quoting Sea Robin Pipeline Co.* , 127 F.3d at 370 (citations omitted)). 85. Further, the courts have stated that the Commission may not make the jurisdictional distinctions required under NGA section 1(b) simply to assure a desirable policy result. 110 Thus we cannot adopt the commenter's notion that we can simply create a test to distinguish gathering from jurisdictional transmission that is geared to the preordained result that more offshore pipelines will be found to perform a jurisdictional transportation rather than a gathering one. The courts have also held that as long as the NGA contemplates a distinction between gathering and jurisdictional transportation, the Commission is required to make those distinctions even when doing so is difficult. 111 In other words, we may not devise a newly conceived test just because it is easier to apply. For all of these reasons, at this time the Commission is not adopting a new primary function test applicable to offshore pipelines and will continue to apply its current test in making jurisdictional determinations on a case-by-case basis. 110 *See ExxonMobil* , 297 F.3d at 1088 ( *citing Sea Robin Pipeline Co.* , 127 F.3d at 371). 111 *See Id.* at 1080 (“Congress did not intend to extend the FERC's jurisdiction to all natural gas pipelines; * * * it demands the drawing of jurisdictional lines, even when the end of gathering is not easily located.” ( *citing Sea Robin Pipeline Co.* , 127 F.3d 365, 371 (5th Cir. 1997))). 86. Producer commenters also contend that the Commission should modify the way it considers whether it is in the public interest under NGA section 7(b) to permit a natural gas pipeline to reclassify or abandon certificated facilities or services, regardless of whether they could be considered to be primarily gathering or production. 112 Commenters argue that because a natural gas company receives benefits by obtaining a certificate, the company should not be able to avoid corresponding obligations by removing facilities or services from the Commission's jurisdiction. They assert that the D.C. Circuit erroneously held that section 7(b) does not apply to a pipeline's reclassification of certificated facilities or services to gathering or production. 113 112 *See, e.g., United Gas Pipeline Co.* v. *McCombs* , 442 U.S. 529, 538-539 (1978). 113 *See ExxonMobil* , 297 F.3d at 1088. 87. The commenters suggest that when the Commission has permitted such reclassifications or transfers, it has only paid lip service to the public interest standard that must be met before services or facilities may be abandoned under NGA section 7(b). They propose that the Commission carefully consider and require mitigation of any potential for abuse of market power when it reviews a proposed abandonment of certificated facilities or services. Among the factors the Commission should consider are the impact on existing customers, the market power of the company that is acquiring the facilities or services, the commercial considerations underlying the contracts entered into by the interstate pipeline and its customers, and the ongoing useful life of the facility. They urge that, if it is found that an acquiring company will be able to exercise market power or will provide service over facilities transferred or sold by a natural gas company in a spin-down or spin-off, the acquiring company would be engaged in interstate transportation and, therefore, would fall within the Commission's jurisdiction. As noted, some commenters also proposed changing the test to determine whether facilities perform a gathering or production function by introducing economic or historical factors. 88. As some commenters assert, it is true that the U.S. Court of Appeals for the 5th Circuit and the U.S. Court of Appeals for the District of Columbia Circuit hold different views regarding the extent to which the NGA's abandonment authority under section 7(b) should be applied to certificated facilities and services that a natural gas company seeks to reclassify as non-jurisdictional gathering facilities and continue to operate. 114 In any event, those who suggest that the Commission should first determine, based on market power issues and other public interest concerns, whether it is consistent with the public convenience or necessity to permit a pipeline to reclassify or transfer facilities or services before the Commission actually determines their proper function are putting the proverbial cart before the horse. 114 The 5th Circuit held in *Pacific Gas & Electric Co.* v. *FERC* , 106 F.3d 1190 (5th Cir. 1997) that the Commission has discretion under section 7(b) to examine, to some extent, whether it is in the public interest for a natural gas pipeline to abandon facilities that have been classified as gathering. In contrast, the D.C. Circuit in *Williams Gas Processing-Gulf Coast Co., L.P.* v. *FERC* , 331 F.3d 1011 (D.C. Cir. 2003), held that once the Commission determines that a facility is not dedicated to a jurisdictional function, it does not have authority under section 7(b) to determine whether a reclassification or transfer of the facilities is in the public interest. 89. When a jurisdictional natural gas company comes before the Commission to request that the function of certificated facilities it owns and operates be deemed non-jurisdictional gathering or production, the starting point for determining whether the subject facilities are performing primarily a gathering or production function under NGA section 1(b) is to consider the physical characteristics of the subject facilities. While the courts have sanctioned giving some weight to non-physical factors when applying the primary function test, non-physical factors are secondary, and generally only come into play if application of the physical factors results in a close call. 115 The market power, economic, and historical considerations that some commenters advocate are not physical tests, and therefore cannot be given substantial weight. 115 *See, e.g., Sea Robin Pipeline Co.* v. *FERC* , 127 F.3d 365, 370 (5th Cir. 1997) and *Lomak Petroleum, Inc.* v. *FERC* , 206 F.3d 1193 (D.C. Cir. 2000). *The Commission orders:*
(A)Commission policy concerning the assertion of jurisdiction over the gathering services of natural gas company affiliates is clarified as discussed above.
(B)Docket No. PL05-10-000 is terminated. By the commission. Magalie R. Salas, Secretary. [FR Doc. E7-4074 Filed 3-7-07; 8:45 am] BILLING CODE 6717-01-P ENVIRONMENTAL PROTECTION AGENCY [FRL-8285-6] EPA Science Advisory Board
(SAB)Staff Office Request for Nominations for Clean Air Scientific Advisory Committee (CASAC) Particular Matter (PM Review Panel) AGENCY: Environmental Protection Agency (EPA). ACTION: Notice. SUMMARY: The U.S. Environmental Protection Agency (EPA or Agency) Science Advisory Board
(SAB)Staff Office is announcing the formation of the Clean Air Scientific Advisory Committee (CASAC) review panel for Particulate Matter (PM). The SAB Staff Office is soliciting public nominations for this Panel. DATES: New nominations should be submitted by March 29, 2007. FOR FURTHER INFORMATION CONTACT: Any member of the public wishing further information regarding this Request for Nominations may contact Mr. Fred Butterfield, Designated Federal Officer (DFO), EPA Science Advisory Board (1400F), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; via telephone/voice mail:
(202)343-9994; fax:
(202)233-0643; or e-mail at: *butterfield.fred@epa.gov* . General information concerning the CASAC or the EPA Science Advisory Board can be found on the EPA Web site at: *http://www.epa.gov/sab* . SUPPLEMENTARY INFORMATION: *Background:* The Clean Air Scientific Advisory Committee (CASAC) was established under section 109(d)(2) of the Clean Air Act (CAA or Act) (42 U.S.C. 7409) as an independent scientific advisory committee. CASAC provides advice, information and recommendations on the scientific and technical aspects of air quality criteria and national ambient air quality standards (NAAQS) under sections 108 and 109 of the Act. The CASAC is a Federal advisory committee chartered under the Federal Advisory Committee Act (FACA), as amended, 5 U.S.C., App. Section 109(d)(1) of the Clean Air Act
(CAA)requires that EPA carry out a periodic review and revision, as appropriate, of the air quality criteria and the NAAQS for the six “criteria” air pollutants, including PM. This **Federal Register** notice solicitation is seeking nominations for additional, subject-matter experts to augment the chartered CASAC. This CASAC Panel will review EPA's technical and policy assessments that form the basis for updating the NAAQS for PM. The CASAC PM Review Panel will comply with the provisions of FACA and all appropriate SAB Staff Office procedural policies. *Nominator's Assessment of Expertise* . The SAB Staff Office requests nominees for the CASAC PM Review Panel who are nationally-recognized experts in one or more of the following disciplines:
(a)*Atmospheric Science* . Expertise in evaluating the physical/chemical properties of particulate matter including transport of PM on urban to global scales, transformation of primary particles in the atmosphere to secondary particles, and movement of PM between media through deposition and other such mechanisms. Expertise in evaluating natural and anthropogenic sources and emissions of PM and resulting ambient levels, pertinent monitoring or measurement methods for PM, and spatial and temporal trends in PM atmospheric concentrations.
(b)*Human Exposure and Risk Assessment/Modeling* . Expertise in measuring general population exposure to PM and/or in modeling exposure to PM emitted from ambient and indoor sources. Expertise in human health risk analysis modeling for PM related to respiratory, cardiovascular, and other non-cancer health effects as well as cancer. Expertise in characterizing uncertainty in exposure and risk analyses.
(c)*Dosimetry* . Expertise in evaluating the dosimetry of animal and human subjects, including identifying factors associated with differential patterns of inhalation and/or deposition/uptake in various respiratory tract regions that may contribute to differential susceptibility of sensitive subpopulations and animal-to-human dosimetry extrapolations.
(d)*Toxicology* . Expertise in evaluating and interpreting experimental laboratory animal studies, including animal models simulating sensitive subpopulations ( *e.g.* , children, older adults, individuals with preexisting respiratory or cardiac disease), and *in vitro* studies of the effects of PM on pulmonary and extrapulmonary ( *e.g.* , cardiovascular, immunological) endpoints and cancer.
(e)*Controlled Human Exposure* . Expertise in evaluating and interpreting controlled human exposure studies of the effects of PM on the general population and sensitive subpopulations ( *e.g.* , children, older adults, individuals with preexisting respiratory or cardiac disease). Experts would include physicians with experience in the clinical treatment of cardiopulmonary diseases, including asthma, chronic obstructive pulmonary disease (COPD), and diabetes.
(f)*Epidemiology and Biostatistics* . Expertise in evaluating epidemiological evidence of the effects of exposures to ambient PM and other major air pollutants ( *e.g.* , ozone, SO <sup>2</sup> , NO <sup>2</sup> , carbon monoxide) on the general population and sensitive subpopulations ( *e.g.* , children, older adults, individuals with preexisting respiratory or cardiac disease). Expertise in evaluating a broad range of health endpoints, including mortality and morbidity effects ( *e.g.* , respiratory symptoms, lung function decrements, asthma medication use, physiological changes or biomarkers for cardiac changes, cardiopulmonary-related emergency department visits, cardiopulmonary-related hospital admissions, cancer). Expertise in using biostatistical models to interpret epidemiological evidence.
(g)*Effects on Visibility Impairment* . Expertise in evaluating and interpreting studies of the effects of PM on local visibility impairment as well as regional haze. Expertise would include evaluating visibility trends and conditions in Class I, urban, and non-urban areas, studies of economic value of improving visual air quality, and approaches to assessing public perceptions of visibility impairment and judgments about the acceptability of varying degrees of visibility impairment.
(h)*Ecological Effects* . Expertise in evaluating the effects of exposure to PM on agricultural crops and natural ecosystems and their components, both flora and fauna, ranging from biochemical/sub-cellular effects on organisms to increasingly more complex levels of ecosystem organization. Appropriate expertise disciplines include: Aquatic chemistry; aquatic ecology/biology; limnology; terrestrial ecology; forest ecology; grassland ecology; rangeland ecology; terrestrial/aquatic biogeochemistry; terrestrial/aquatic nutrient cycling; and terrestrial/aquatic wildlife biology and soil chemistry.
(i)*Other Welfare Effects* . Expertise in evaluating the effects of PM on other public welfare effects, including damage to materials, and also the atmospheric interactions of PM as related to global climate conditions.
(j)*Ecosystem Exposure and Risk Assessment/Modeling* . Expertise in deposition modeling across a range of scales from local watershed to landscape to continental; static and dynamic ecosystem response models; integrated assessment models; identification of bioindicators useful for tracking ecosystem change; and methods and approaches for estimating damage to ecosystems.
(k)*Resource Valuation* . Expertise in ecological resource and other welfare effects valuation and/or economic benefits assessment approaches and models. *Process and Deadline for Submitting Nominations:* Any interested person or organization may nominate qualified individuals to add expertise to the CASAC PM Review Panel in the areas of expertise described above. Nominations should be submitted in electronic format through the SAB Web site at the following URL: *http://www.epa.gov/sab;* or directly via the *Form for Nominating Individuals to Panels of the EPA Science Advisory Board* link found at URL: *http://www.epa.gov/sab/panels/paneltopics.html* . Please follow the instructions for submitting nominations carefully. To be considered, nominations should include all of the information required on the associated forms. Anyone unable to submit nominations using the electronic form and who has any questions concerning the nomination process may contact Mr. Fred Butterfield, DFO, as indicated above in this notice. Nominations should be submitted in time to arrive no later than March 29, 2007. For nominees to be considered, please include: Contact information; a curriculum vitae; a biosketch of no more than two paragraphs (containing information on the nominee's current position, educational background, areas of expertise and research activities, service on other advisory committees and professional societies; the candidate's special expertise related to the panel being formed; and sources of recent grant and/or contract support). The EPA SAB Staff Office will acknowledge receipt of nominations. The names and biosketchs of qualified nominees identified by respondents to the **Federal Register** notice and additional experts identified by the SAB Staff will be posted on the SAB Web site at: *http://www.epa.gov/sab* . Public comments on this “Short List” of candidates will be accepted for 21 calendar days. The public will be requested to provide relevant information or other documentation on nominees that the SAB Staff Office should consider in evaluating candidates. For the EPA SAB Staff Office, a balanced subcommittee or review panel includes candidates who possess the necessary domains of knowledge, the relevant scientific perspectives (which, among other factors, can be influenced by work history and affiliation), and the collective breadth of experience to adequately address the charge. In establishing the final CASAC PM Review Panel, the SAB Staff Office will consider public comments on the “Short List” of candidates, information provided by the candidates themselves, and background information independently gathered by the SAB Staff Office. Specific criteria to be used for Panel membership include:
(a)Scientific and/or technical expertise, knowledge, and experience (primary factors);
(b)availability and willingness to serve;
(c)absence of financial conflicts of interest;
(d)absence of an appearance of a lack of impartiality; and
(e)skills working in committees, subcommittees and advisory panels; and, for the Panel as a whole,
(f)diversity of, and balance among, scientific expertise, viewpoints, *etc* . The SAB Staff Office's evaluation of an absence of financial conflicts of interest will include a review of the “Confidential Financial Disclosure Form for Special Government Employees Serving on Federal Advisory Committees at the U.S. Environmental Protection Agency” (EPA Form 3110-48). This confidential form allows Government officials to determine whether there is a statutory conflict between that person's public responsibilities (which includes membership on an EPA Federal advisory committee) and private interests and activities, or the appearance of a lack of impartiality, as defined by Federal regulation. The form may be viewed and downloaded from the following URL address: *http://www.epa.gov/sab/pdf/epaform3110-48.pdf* . The approved policy under which the EPA SAB Office selects subcommittees and review panels is described in the following document: *Overview of the Panel Formation Process at the Environmental Protection Agency Science Advisory Board* (EPA-SAB-EC-02-010), which is posted on the SAB Web site at: *http://www.epa.gov/sab/pdf/ec02010.pdf* . Dated: March 2, 2007. Anthony F. Maciorowski, Deputy Director, EPA Science Advisory Board Staff Office. [FR Doc. E7-4168 Filed 3-7-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY [FRL-8284-4] Notice of a Second Workshop on the Development of Regulations for Aircraft Public Water Systems AGENCY: Environmental Protection Agency. ACTION: Notice of a public meeting. SUMMARY: The Environmental Protection Agency
(EPA)is holding a second workshop on the development of regulations for aircraft public water systems. This workshop will provide information about recent activities and an overview of approaches for the proposed Aircraft Drinking Water Rule. This is the second workshop in a series designed to gain perspectives from representatives from industry, government, public interest groups, and the general public. DATES: The workshop will be held from 9 a.m. to 5 p.m., Eastern time (ET), on Wednesday, March 28, 2007 and from 9 a.m. to 4 p.m. ET, Thursday, March 29, 2007, with one and a half hour lunch breaks each day. ADDRESSES: The meeting will be held at the Sheraton Crystal City Hotel, 1800 Jefferson Davis Highway, Arlington, VA in Ballroom A. The hotel is located adjacent to the Crystal City Metro Station on the blue and yellow lines. FOR FURTHER INFORMATION CONTACT: For general information about this workshop or to pre-register, please contact Kathryn Aegis, RESOLVE, 1255 23rd St., NW., Washington, DC 20037, telephone number 202-965-6393, or e-mail at *kaegis@resolv.org.* For technical inquiries regarding the development of an aircraft drinking water rule, contact Rick Naylor at
(202)564-3847, or by e-mail: *naylor.richard@epa.gov.* SUPPLEMENTARY INFORMATION: There is no charge for attending this workshop as an observer, but seats are limited, so register as soon as possible. We suggest attendees book their hotel room as soon as possible because the workshop is being held during a peak time of the tourist season for Washington, DC. Special Accommodations Any person needing special accommodations at this meeting, including wheelchair access, should contact Kathryn Aegis at the phone number or e-mail address listed in the FOR FURTHER INFORMATION CONTACT section of this notice. Requests for special accommodations should be made at least five business days in advance of the public meeting. Dated: February 23, 2007. Cynthia C. Dougherty, Director, Office of Ground Water and Drinking Water. [FR Doc. E7-4174 Filed 3-7-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY [FRL-8284-3] Notice of Availability of the Framework for Metals Risk Assessment AGENCY: Environmental Protection Agency (EPA). ACTION: Notice of document availability. SUMMARY: The U.S. Environmental Protection Agency
(EPA)is announcing the availability of the final “Framework for Metals Risk Assessment” (EPA 120/R-07/001, March 2007). The purpose of the Framework is to present key guiding principles based on the unique attributes of metals (as differentiated from organic and organometallic compounds) and to describe how these metals-specific attributes and principles may then be applied in the context of existing EPA risk assessment guidance and practices. This Framework document is not a prescriptive guide on how any particular type of assessment should be conducted within an EPA program or regional office. Rather, it outlines key metal principles and describes how they should be considered in conducting human health and ecological risk assessments to advance our understanding of metals impact and foster consistency across EPA programs and regions. As a result the Framework is a science-based document that describes basic principles that address the special attributes and behaviors of metals and metal compounds to be considered when assessing their human health and ecological risks. EPA's Risk Assessment Forum oversaw the development of this document, which included input from stakeholders and experts throughout the Agency, obtained through several expert workshops, followed by peer review by the EPA Science Advisory Board. The Framework sets out a variety of principles that are general, fundamental properties of metals, which should be addressed and incorporated into all inorganic metals risk assessments. The five overarching principles are summarized as follows:
(1)Metals are naturally occurring constituents in the environment and vary in concentrations across geographic regions;
(2)All environmental media have naturally occurring mixtures of metals, and metals are often introduced into the environment as mixtures;
(3)Some metals are essential for maintaining proper health of humans, animals, plants and microorganisms;
(4)Metals, as chemical elements, and unlike organic chemicals, are neither created nor destroyed by biological or chemical processes, although, these processes can transform metals from one species to another (valence states) and can convert them between inorganic and organic forms; and
(5)The absorption, distribution, transformation and excretion of a metal within an organism depends on the metal, the form of the metal or metal compound, and the organism's ability to regulate and/or store the metal. ADDRESSES: The final document is available electronically through the EPA Office of the Science Advisor's Web site at: *http://www.epa.gov/osa/metalsframework.* A limited number of paper copies will be available from EPA's National Service Center for Environmental Publications (NSCEP), P.O. Box 42419, Cincinnati, OH 45242; telephone 1-800-490-9198 or 513-489-8190; facsimile 301-604-3408; e-mail *NSCEP@bps-lmit.com.* Please provide your name and mailing addresses and the title and EPA number (as given above) of the requested publication. FOR FURTHER INFORMATION CONTACT: Dr. Randall S. Wentsel, Risk Assessment Forum Technical Writing Panel Co-chair, Mail Code 8101-R, Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; telephone number:
(202)564-3214; fax number:
(202)564-2070, E-mail: *wentsel.randy@epa.gov.* SUPPLEMENTARY INFORMATION: In December 2002 EPA's Science Policy Council tasked an Agency workgroup, under the oversight of the Risk Assessment Forum, with developing a plan for ensuring the consistent application of scientific principles to metals risk assessment. A step-wise plan was developed beginning with the Metals Action Plan (MAP), which included brief descriptions of the Agency's current activities on metals, identified critical scientific issues, and recommended the scope of the metals framework. The MAP was reviewed by EPA's Science Advisory Board. Then, EPA commissioned individual scientists to develop issue papers on important topics in metals risk assessment, including environmental chemistry, exposure, human health effects, ecological effects, and bioavailability and bioaccumulation. The Framework was developed based, in part, on these issues papers and reviewed by the Agency-wide workgroup. Additional workshops and peer review activities were conducted at multiple intervals during the development of the Framework, and the Agency consulted with other federal agencies at key points during its development. Finally, the Framework underwent external peer review by EPA's Science Advisory Board. Dated: March 1, 2007. George M. Gray, EPA Science Advisor. [FR Doc. E7-4035 Filed 3-7-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY [Docket# EPA-RO4-SFUND-2007-0169; FRL-8285-2] Jernigan Trucking Dump Site, Seffner, Hillsborough County, FL; Notice of Settlement AGENCY: Environmental Protection Agency (EPA). ACTION: Notice of settlement. SUMMARY: Under section 122(h)(1) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the United States Environmental Protection Agency has entered into a settlement for reimbursement of past response costs concerning the Jernigan Trucking Dump Site located in Seffner, Hillsborough County, Florida. DATES: The Agency will consider public comments on the settlement until April 9, 2007. The Agency will consider all comments received and may modify or withdraw its consent to the settlement if comments received disclose facts or considerations which indicate that the settlement is inappropriate, improper, or inadequate. ADDRESSES: Copies of the settlement are available from Ms. Paula V. Batchelor. Submit your comments, identified by Docket ID No. EPA-RO4-SFUND-2007-0169 or Site name Jernigan Trucking Dump Superfund Site by one of the following methods: • *www.regulations.gov:* Follow the on-line instructions for submitting comments. • *E-mail:* *Batchelor.Paula@gov* . • *Fax:* 404/562-8842/Attn: Paula V. Batchelor • *Mail:* Ms. Paula V. Batchelor, U.S. EPA Region 4, WMD-SEIMB, 61 Forsyth Street, SW., Atlanta, Georgia 30303. “In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 20503.” *Instructions:* Direct your comments to Docket ID No. EPA-R04-SFUND-2007-0169. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *www.regulations.gov* or e-mail. The *www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *www.regulations.gov* your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm* *Docket:* All documents in the docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in *www.regulations.gov* or in hard copy at the U.S. EPA Region 4 Office located at 61 Forsyth Street, SW., Atlanta, Georgia 30303. Regional office is open from 7 a.m. until 6:30 p.m. Monday through Friday, excluding legal holidays. Written comments may be submitted to Ms. Batchelor within 30 calendar days of the date of this publication. FOR FURTHER INFORMATION CONTACT: Paula V. Batchelor at 404/562-8887. Dated: February 21, 2007. Rosalind H. Brown, Chief, Superfund Enforcement & Information Management Branch, Superfund Division. [FR Doc. E7-4172 Filed 3-7-07; 8:45 am] BILLING CODE 6560-50-P EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Meetings; Sunshine Act Date and Time: Thursday, March 15, 2007, 1 p.m., Eastern Time. Place: Clarence M. Mitchell, Jr. Conference Room on the Ninth Floor of the EEOC Office Building, 1801 “L” Street, NW., Washington, DC 20507. Status: The meeting will be open to the public. Matters to be Considered: *Open Session:* 1. Announcement of Notation Votes, and 2. FY 2007 Budget Allocations for the State and Local Program. Note: In accordance with the Sunshine Act, the meeting will be open to public observation of the Commission's deliberations and voting. (In addition to publishing notices on EEOC Commission meetings in the **Federal Register** , the Commission also provides a recorded announcement a full week in advance on future Commission sessions.) Please telephone
(202)663-7100 (voice) and
(202)663-4074
(TTY)at any time for information on these meetings. The EEOC provides sign language interpretation at Commission meetings for the hearing impaired. Requests for other reasonable accommodations may be made by using the voice and TTY numbers listed above. CONTACT PERSON FOR MORE INFORMATION: Stephen Llewellyn, Acting Executive Officer on
(202)663-4070. Dated: March 6, 2007. Stephen Llewellyn, Acting Executive Officer, Executive Secretariat. [FR Doc. 07-1108 Filed 3-6-07; 1:27 pm]
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CFR
- Annual absolute, competitive preference, and invitational priorities.§ 75.105
- Shortened proceedings.§ 590.316
- Protests other than under Rule 208 (Rule 211).§ 385.211
- Filings and Other Submissions.§ 385.2001
- Intervention (Rule 214).§ 385.214
- Method of notice; dates established in notice (Rule 210).§ 385.210
- Hearings on applications; consultation on terms and conditions; motions to intervene; alternative procedures.§ 4.34
- Release of firm capacity on interstate pipelines.§ 284.8
- Rates.§ 284.10
- Non-discrimination requirements.§ 358.4
- Definitions.§ 358.3
- Applicability.§ 358.1
41 references not yet in our index
- 20 USC 7249
- 34 CFR 79
- Pub. L. 102-486
- 46 USC 883
- 10 CFR 590
- 18 CFR 380
- 16 USC 791a-825r
- 90 F.3d 536
- 373 F.3d 1335
- 324 U.S. 581
- 50 FR 42
- 824 F.2d 981
- 485 U.S. 1006
- 888 F.2d 136
- 912 F.2d 1496
- 498 U.S. 1084
- 929 F.2d 1261
- 88 F.3d 1105
- 345 F.3d 910
- 498 F.2d 734
- 998 F.2d 1313
- 320 U.S. 591
- 489 U.S. 493
- 365 U.S. 1
- 406 U.S. 621
- 373 F.3d 183
- 453 U.S. 473
- 15 USC 12-17
- 449 F.2d 846
- 321 U.S. 349
- 353 F.2d 710
- 18 CFR 358
- 468 F.3d 831
- 297 F.3d 1071
- 540 U.S. 937
- 331 F.3d 1011
- 372 U.S. 84
- 127 F.3d 365
- 442 U.S. 529
- 106 F.3d 1190
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Citation graph
cites case law
Notices
Notice of intention to remove certain questions from proposed IPEDS survey
F. App'x90 F.3d 536
F. App'x373 F.3d 1335
SCOTUS324 U.S. 581
Cites 60 · showing 12Cited by 0 across 0 sources