18 Cfr 346

Federal Energy Regulatory Commission
to a settlement judge pursuant to
§ 385.603 of this chapter for recommended resolution. Failure to participate in such negotiations in good
faith is a ground for decision against
the party so failing to participate on
any issue that is the subject of negotiation by other parties.
[Order 578, 60 FR 19505, Apr. 19, 1995]

§ 346.2
(e) Supersession of a quotation or tender. A quotation or tender which supersedes a prior quotation or tender must,
by a statement shown immediately
under the number of the new document, cancel the prior document number.
[Order 561, 58 FR 58778, Nov. 4, 1993, as
amended by Order 714, 73 FR 57537, Oct. 3,
2008]

PART 344—FILING QUOTATIONS
FOR U.S. GOVERNMENT SHIPMENTS AT REDUCED RATES
Sec.
344.1
344.2

Applicability.
Manner of submitting quotations.

AUTHORITY: 42 U.S. 7101–7352; 49 U.S.C. 1–27.

§ 344.1

Applicability.

The provisions of this part will apply
to quotations or tenders made by all
pipeline common carriers to the United
States Government, or any agency or
department thereof, for the transportation, storage, or handling of petroleum and petroleum products at reduced rates as permitted by section 22
of the Interstate Commerce Act. Excepted are filings which involve information, the disclosure of which would
endanger the national security.
[Order 561, 58 FR 58778, Nov. 4, 1993]

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§ 344.2 Manner
quotations.

of

submitting

(a) The quotation or tender must be
submitted to the Commission concurrently with the submittal of the
quotation or tender to the Federal department or agency for whose account
the quotation or tender is offered or
the proposed services are to be rendered.
(b) [Reserved]
(c) Filing procedure. (1) The quotation
must be filed with a letter of transmittal that prominently indicates that
the filing is in accordance with section
22 of the Interstate Commerce Act.
(2) All filings pursuant to this part
must be filed electronically consistent
with §§ 341.1 and 341.2 of this chapter.
(d)
Numbering.
The
copies
of
quotations or tenders which are filed
with the Commission by each carrier
must be numbered consecutively.

PART 346—OIL PIPELINE COST-OFSERVICE FILING REQUIREMENTS
Sec.
346.1 Content of filing for cost-of-service
rates.
346.2 Material in support of initial rates or
change in rates.
346.3 Asset retirement obligations.
AUTHORITY: 42 U.S.C. 7101–7352; 49 U.S.C.
60502; 49 App. U.S.C. 1–85.

§ 346.1 Content of filing for cost-ofservice rates.
A carrier that seeks to establish
rates pursuant to § 342.2(a) of this chapter, or a carrier that seeks to change
rates pursuant to § 342.4(a) of this chapter, or a carrier described in § 342.0(b) of
this chapter that seeks to establish or
change rates by filing cost, revenue,
and throughput data supporting such
rates, other than pursuant to a Commission-approved settlement, must
file, consistent with the requirements
of §§ 341.1 and 341.2 of this chapter:
(a) A letter of transmittal which conforms to §§ 341.2(c) and 342.4(a) of this
chapter;
(b) The proposed tariff; and
(c) The statements and supporting
workpapers set forth in § 346.2.
[59 FR 59146, Nov. 16, 1994, as amended by
Order 588, 61 FR 38569, July 25, 1996; Order
714, 73 FR 57537, Oct. 3, 2008]

§ 346.2 Material in support of initial
rates or change in rates.
A carrier that files for rates pursuant
to § 342.2(a) or § 342.4(a) of this chapter,
or a carrier described in § 342.0(b) that
files to establish or change rates by filing cost, revenue, and throughput data
supporting such rates, other than pursuant to a Commission-approved settlement, must file the following statements, schedules, and supporting
workpapers. The statement, schedules,

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§ 346.2

18 CFR Ch. I (4–1–16 Edition)

and workpapers must be based upon an
appropriate test period.
(a) Base and test periods defined. (1)
For a carrier which has been in operation for at least 12 months:
(i) A base period must consist of 12
consecutive months of actual experience. The 12 months of experience must
be adjusted to eliminate nonrecurring
items (except minor accounts). The filing carrier may include appropriate
normalizing adjustments in lieu of nonrecurring items.
(ii) A test period must consist of a
base period adjusted for changes in revenues and costs which are known and
are measurable with reasonable accuracy at the time of filing and which
will become effective within nine
months after the last month of available actual experience utilized in the
filing. For good cause shown, the Commission may allow reasonable deviation from the prescribed test period.
(2) For a carrier which has less than
12 months’ experience, the test period
may consist of 12 consecutive months
ending not more than one year from
the filing date. For good cause shown,
the Commission may allow reasonable
deviation from the prescribed test period.
(3) For a carrier which is establishing
rates for new service, the test period
will be based on a 12-month projection
of costs and revenues.
(b) Cost-of-service summary schedule.
This schedule must contain the following information:
(1) Total carrier cost of service for
the test period.
(2) Throughput for the test period in
both barrels and barrel-miles.
(3) For filings pursuant to § 342.4(a) of
this chapter, the schedule must include
the proposed rates, the rates which
would be permitted under § 342.3 of this
chapter, and the revenues to be realized from both sets of rates.
(c) Content of statements. Any cost-ofservice rate filing must include supporting statements containing the following information for the test period.
(1) Statement A—total cost of service.
This statement must summarize the
total cost of service for a carrier (operating and maintenance expense, depreciation and amortization, return, and
taxes) developed from Statements B

through G described in paragraphs (c)
(2) through (7) of this section.
(2) Statement B—operation and maintenance expense. This statement must set
forth the operation, maintenance, administration and general, and depreciation expenses for the test period. Items
used in the computations or derived on
this statement must consist of operations, including salaries and wages,
supplies and expenses, outside services,
operating fuel and power, and oil losses
and shortages; maintenance, including
salaries and wages, supplies and expenses, outside services, and maintenance and materials; administrative
and general, including salaries and
wages, supplies and expenses, outside
services, rentals, pensions and benefits,
insurance, casualty and other losses,
and pipeline taxes; and depreciation
and amortization.
(3) Statement C—overall return on rate
base. This statement must set forth the
rate base for return purposes from
Statement E in paragraph (c)(5) of this
section and must also state the
claimed rate of return and the application of the claimed rate of return to
the overall rate base. The claimed rate
of return must consist of a weighted
cost of capital, combining the rate of
return on debt capital and the real rate
of return on equity capital. Items used
in the computations or derived on this
statement must include deferred earnings, equity ratio, debt ratio, weighted
cost of capital, and costs of debt and
equity.
(4) Statement D—income taxes. This
statement must set forth the income
tax computation. Items used in the
computations or derived on this statement must show: return allowance, interest expense, equity return, annual
amortization of deferred earnings, depreciation on equity AFUDC, underfunded or overfunded ADIT amortization amount, taxable income, tax factor, and income tax allowance.
(5) Statement E—rate base. This statement must set forth the return rate
base. Items used in the computations
or derived on this statement must include beginning balances of the rate
base at December 31, 1983, working capital (including materials and supplies,

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Federal Energy Regulatory Commission
prepayments, and oil inventory), accrued depreciation on carrier plant, accrued depreciation on rights of way,
and accumulated deferred income
taxes; and adjustments and end balances for original cost of retirements,
interest during construction, AFUDC
adjustments, original cost of net additions and retirements from land, original cost of net additions and retirements from rights of way, original cost
of plant additions, original cost accruals for depreciation, AFUDC accrued
depreciation adjustment, original cost
depreciation accruals added to rights of
way, net charge for retirements from
accrued depreciation, accumulated deferred income taxes, changes in working capital (including materials and
supplies, prepayments, and oil inventory), accrued deferred earnings, annual amortization of accrued deferred
earnings, and amortization of starting
rate base write-up.
(6) Statement F—allowance for funds
used during construction. This statement must set forth the computation
of allowances for funds used during
construction (AFUDC) including the
AFUDC for each year commencing in
1984 and a summary of AFUDC and
AFUDC depreciation for the years 1984
through the test year.
(7) Statement G—revenues. This statement must set forth the gross revenues
for the actual 12 months of experience
as computed under both the presently
effective rates and the proposed rates.
If the presently effective rates are not
at the maximum ceiling rate established under § 342.3 of this chapter, then
gross revenues must also be computed
and set forth as if the ceiling rates
were effective for the 12 month period.

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[59 FR 59146, Nov. 16, 1994, as amended by
Order 588, 61 FR 38569, July 25, 1996; Order
606, 64 FR 44405, Aug. 16, 1999]

§ 346.3 Asset retirement obligations.
(a) A carrier that files material in
support of initial rates or change in
rates under § 346.2 and has recorded
asset retirement obligations on its
books must provide a schedule, as part
of the supporting workpapers, identifying all cost components related to
the asset retirement obligations that
are included in the book balances of all
accounts reflected in the cost of serv-

§ 347.1
ice computation supporting the proposed rates. However, all cost components related to asset retirement obligations that would impact the calculation of rate base, such as carrier property and related accumulated depreciation and accumulated deferred income
taxes, may not be reflected in rates and
must be removed from the rate base
calculation through a single adjustment.
(b) A carrier seeking to recover
nonrate base costs related to asset retirement costs in rates must provide,
with its filing under § 346.2 of this part,
a detailed study supporting the
amounts proposed to be collected in
rates.
(c) A carrier who has recorded asset
retirement obligations on its books but
is not seeking recovery of the asset retirement costs in rates, must remove
all asset retirement obligations related
cost components from the cost of service supporting its proposed rates.
[Order 631, 68 FR 19625, Apr. 21, 2003]

PART 347—OIL PIPELINE
DEPRECIATION STUDIES
AUTHORITY: 42 U.S.C. 7101–7352; 49 U.S.C.
60502; 49 App. U.S.C. 1–85.

§ 347.1 Material to support request for
newly established or changed property account depreciation studies.
(a) Means of filing. Filing of a request
for new or changed property account
depreciation rates must be made with
the Secretary of the Commission.
(b) All filings under this Part must
be made electronically pursuant to the
requirements of §§ 341.1 and 341.2 of this
chapter.
(c) Transmittal letter. Letters of transmittal must give a general description
of the change in depreciation rates
being proposed in the filing. Letters of
transmittal must also certify that the
letter of transmittal (not including the
information to be provided, as identified in paragraphs (d) and (e) of this
section) has been sent to each shipper
and to each subscriber. If there are no
subscribers, letters of transmittal must
so state.

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