18 Cfr 154.402

erowe on DSK2VPTVN1PROD with CFR

Federal Energy Regulatory Commission
(b) Applications for rate treatment approval. (1) An application for advance
approval of rate treatment may be
filed by a natural gas company for
RD&D expenditures related to a project
or group of projects undertaken by the
company or as part of a project undertaken by others. When more than one
company supports an RD&D organization, the RD&D organization may submit an application that covers the organization’s RD&D program. Approval
by the Commission of such an RD&D
application and program will constitute approval of the individual companies’ contributions to the RD&D organization.
(2) An application for advance approval of rate treatment must include
a 5-year program plan and must be
filed at least 180 days prior to the commencement of the 5-year period of the
plan.
(3) A 5-year program plan must include at a minimum:
(i) A statement of the objectives for
the 5-year period that relates the objectives to the interests of ratepayers,
the public, and the industry and to the
objectives of other major research organizations.
(ii) Budget, technical, and schedule
information in sufficient detail to explain the work to be performed and
allow an assessment of the probability
of success and a comparison with other
organizations’ research plans.
(iii) The commencement date, expected termination date, and expected
annual costs for individual RD&D
projects to be initiated during the first
year of the plan.
(iv) A discussion of the RD&D efforts
and progress since the preparation of
the program plan submitted the previous year and an explanation of any
changes that have been made in objectives, priorities, or budgets since the
plan of the previous year.
(v) A statement identifying all jurisdictional natural gas companies that
will support the program and specifying the amounts of their budgeted
support.
(vi) A statement identifying those
persons involved in the development,
review, and approval of the plan and
specifying the amount of effort con-

§ 154.402
tributed and the degree of control exercised by each.
(c) Applications must describe the
RD&D projects in such detail as to satisfy the Commission that the RD&D
expenditures qualify as valid, justifiable, and reasonable.
(d) Within 120 days of the filing of an
application for rate treatment approval and a 5-year program plan, the
Commission will state its decision with
respect to acceptance, partial acceptance, or rejection of the plan, or, when
the complexity of issues in the plan so
requires, will set a date certain by
which a final decision will be made, or
will order the matter set for hearing.
Partial rejection of a plan by the Commission will be accompanied by a decision as to the partial level of acceptance which will be proportionally applied to all contributions listed for jurisdictional companies in the plan. Approval by the Commission of a 5-year
plan constitutes approval for rate
treatment of all projects identified as
starting during the first year of the approved plan. Continued rate treatment
will depend upon review and evaluation
of subsequent annual applications and
5-year program plans.
§ 154.402

ACA expenditures.

(a) Requirements. Upon approval by
the Commission, a natural gas pipeline
company may adjust its rates, annually, to recover from its customers annual charges assessed by the Commission under part 382 of this chapter pursuant to an annual charge adjustment
clause (ACA clause). The ACA clause
must be filed with the Commission and
indicate the amount of annual charges
to be flowed through per unit of energy
sold or transported (ACA unit charge).
The ACA unit charge will be specified
by the Commission at the time the
Commission calculates the annual
charge bills. A company must reflect
the ACA unit charge in each of its rate
schedules applicable to sales or transportation deliveries. The company
must apply the ACA unit charge to the
usage component of rate schedules
with two-part rates. A company may
recover annual charges through an
ACA unit charge only if its rates do

547

VerDate Mar<15>2010

11:37 May 24, 2012

Jkt 226058

PO 00000

Frm 00557

Fmt 8010

Sfmt 8010

Y:\SGML\226058.XXX

226058

§ 154.403

18 CFR Ch. I (4–1–12 Edition)

not otherwise reflect the costs of annual charges assessed by the Commission under § 382.106(a) of this chapter.
The applicable annual charge, required
by § 382.103 of this chapter, must be
paid before the company applies the
ACA unit charge.
(b) Application for Rate Treatment Authorization. A company seeking authorization to use an ACA unit charge must
file with the Commission a separate
ACA tariff sheet or section containing:
(1) A statement that the company is
collecting an ACA per unit charge, as
approved by the Commission, applicable to all the pipeline’s sales and transportation rate schedules,
(2) The per unit charge of the ACA,
(3) The proposed effective date of the
tariff change (30 days after the filing of
the tariff sheet or section, unless a
shorter period is specifically requested
in a waiver petition and approved), and
(4) A statement that the pipeline will
not recover any annual charges recorded in FERC Account 928 in a proceeding under subpart D of this part.
(c) Changes to the ACA unit charge
must be filed annually, to reflect the
annual charge unit rate authorized by
the Commission each fiscal year.

erowe on DSK2VPTVN1PROD with CFR

[Order 582, 60 FR 52996, Oct. 11, 1995, as
amended by Order 714, 73 FR 57535, Oct. 3,
2008]

§ 154.403 Periodic rate adjustments.
(a) This section applies to the passthrough, on a periodic basis, of a single
cost item or revenue item for which
passthrough is not regulated under another section of this subpart, and to revisions on a periodic basis of a gas reimbursement percentage.
(b) Where a pipeline recovers fuel use
and unaccounted-for natural gas in
kind, the fuel reimbursement percentage must be stated in the tariff either
on the tariff sheet stating the currently effective rate or on a separate
tariff sheet or section in such a way
that it is clear what amount of natural
gas must be tendered in kind for each
service rendered.
(c) A natural gas company that
passes through a cost or revenue item
or adjusts its fuel reimbursement percentage under this section, must state
within the general terms and conditions of its tariff, the methodology and

timing of any adjustments. The following must be included in the general
terms and conditions:
(1) A statement of the nature of the
revenue or costs to be flowed through
to the customer;
(2) A statement of the manner in
which the cost or revenue will be collected or returned, whether through a
surcharge, offset, or otherwise;
(3) A statement of which customers
are recipients of the revenue credit and
which rate schedules are subject to the
cost or fuel reimbursement percentage;
(4) A statement of the frequency of
the adjustment and the dates on which
the adjustment will become effective;
(5) A step-by-step description of the
manner in which the amount to be
flowed through is calculated and a
step-by-step
description
of
the
flowthrough mechanism, including how
the costs are classified and allocated.
Where the adjustment modifies a rate
established under subpart D of this
part, the methodology must be consistent with the methodology used in
the proceeding under subpart D of this
part;
(6) Where costs or revenue credits are
accumulated over a past period for
periodic recovery or return, the past
period must be defined and the mechanism for the recovery or return must
be detailed on a step-by-step basis.
Where the natural gas company proposes to use a surcharge to clear an account in which the difference between
costs or revenues, recovered through
rates, and actual costs and revenues
accumulate, a statement must be included detailing, on a step-by-step
basis, the mechanism for calculating
the entries to the account and for passing through the account balance.
(7) Where carrying charges are computed, the calculations must be consistent with the methodology and reporting requirements set forth in
§ 154.501 using the carrying charge rate
required by that section. A natural gas
company must normalize all income
tax timing differences which are the
result of differences between the period
in which expense or revenue enters into
the determination of taxable income
and the period in which the expense or
revenue enters into the determination
of pre-tax book income. Any balance

548

VerDate Mar<15>2010

11:37 May 24, 2012

Jkt 226058

PO 00000

Frm 00558

Fmt 8010

Sfmt 8010

Y:\SGML\226058.XXX

226058