FERC-545, Gas Pipeline Rates: Rate Change (Non-formal) (Revision PL24-1-000)

FERC-545 is required to implement sections 4, 5, and 16 of the Natural Gas Act (NGA), (15 USC 717c-717o, PL 75 688, 52 Stat. 822 and 830). NGA Sections 4, 5, and 16 authorize the Commission to inquire into rate structures and methodologies and to set rates at a just and reasonable level. Specifically, a natural gas company must obtain Commission authorization for all rates and charges made, demanded, or received in connection with the transportation or sale of natural gas in interstate commerce. Under the NGA, a natural gas company’s rates must be just and reasonable and not unduly discriminatory or preferential. The Commission may act under different sections of the NGA to effect a change in a natural gas company’s rates. When the Commission reviews changes in rates that a natural gas company has proposed, it is subject to the requirement of section 4(e) of the NGA. Under section 4(e), the natural gas company bears the burden of proving that its proposed rates are just and reasonable. For example, when a pipeline files to increase its rates, it makes a filing with the Commission under section 4 of the NGA. These types of filings are referred to as general section 4 rate cases. In the proceedings, the Commission reviews all of a pipeline’s rates and services. A pipeline can file a general section 4 rate case anytime it wishes, provided the pipeline did not agree otherwise in a settlement. A pipeline must demonstrate that the new rates it proposes to charge are just and reasonable. When a rate increase filing is made pursuant to section 4, the application is typically suspended and set for hearing by a Commission Order. On the other hand, when the Commission seeks to impose its own rate determination, it must do so in compliance with section 5(a) of the NGA. Under section 5, the Commission must first establish that its alternative rate proposal is both just and reasonable. The Final Rule in RM96-1-041 requires interstate gas pipelines to make a one-time tariff filing to reflect the changes in the updated NAESB standards. Interstate natural gas pipelines are required to conduct their transactions in accordance with the stated terms of their tariffs. The compliance tariff filings made in accordance with the final rule ensure that the pipelines acknowledge their obligation to conduct their business transactions in accordance with Commission requirements, which now include a requirement to comply with the business practice standards incorporated by reference into the Commission’s regulations as enforceable, mandatory requirements. The tariff filing also provides transparency for customers, as the business practice standards to be followed by the pipeline are specifically identified in the pipeline’s tariff. In the Final Rule, the Commission amends its regulations at 18 CFR 284.12(a) to incorporate by reference the latest version (Version 3.1) of certain business practice standards adopted by the Wholesale Gas Quadrant (WGQ) of the North American Energy Standards Board (NAESB) applicable to natural gas pipelines. To implement these standards, natural gas pipelines will be required to file tariff sheets to reflect the changed standards. The FERC-545 accounts for the preparation and filing of tariff sheets. Information collection requirements contained within the standards are under FERC-549C, which the Commission is submitting concurrently with this package in a separate ICR.

The latest form for FERC-545, Gas Pipeline Rates: Rate Change (Non-formal) (Revision PL24-1-000) expires 2022-02-28 and can be found here.

Negotiated Rates and Non-Conforming Agreement Filings

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