FERC voted today on orders addressing key outstanding issues associated with the index level used to calculate annual changes for interstate oil pipeline rate ceilings for 2021 through 2026. In its decisions, the Commission confirmed that the index level established in December 2020 will stay in place through June 30, 2026, and denied requests from shippers to reinstate the lower index or require refunds.
“The Commission’s oil pipeline program is extremely important, and our decision today keeps our oil pipeline rate process fair, consistent, and transparent,” said FERC Chairman Laura Swett.
Under indexing, oil pipelines may raise transportation rates up to their applicable rate ceilings. In December 2020, FERC set the index level for the five-year period from July 1, 2021, through June 30, 2026, at Producer Price Index for Finished Goods plus 0.78% (PPI-FG+0.78%). A later change to lower that index was overturned by a federal court and the Commission reinstated the December 2020 index in September 2024.
In today’s order, the Commission also approved limited relief for pipelines affected by the overturned order. Those pipelines may recover applicable rate differences from March 1, 2022, to September 17, 2024, and must notify shippers within 90 days.
Concurrently with this order, the Commission is withdrawing the October 2024 Supplemental Notice of Proposed Rulemaking proposing to amend the index level for the remainder of the five-year period that began July 1, 2021, and concludes June 30, 2026.