C.F.R. » Title 18 » CHAPTER I—FEDERAL ENERGY REGULATORY COMMISSION, DEPARTMENT OF ENERGY › SUBCHAPTER P—REGULATIONS UNDER THE INTERSTATE COMMERCE ACT › PART 342—OIL PIPELINE RATE METHODOLOGIES AND PROCEDURES

18 C.F.R. § 342.4

Other rate changing methodologies

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(a) Cost-of-service rates. A carrier may change a rate pursuant to this section if it shows that there is a substantial divergence between the actual costs experienced by the carrier and the rate resulting from application of the index such that the rate at the ceiling level would preclude the carrier from being able to charge a just and reasonable rate within the meaning of the Interstate Commerce Act. A carrier must substantiate the costs incurred by filing the data required by part 346 of this chapter. A carrier that makes such a showing may change the rate in question, based upon the cost of providing the service covered by the rate, without regard to the applicable ceiling level under § 342.3.

(b) Market-based rates. A carrier may attempt to show that it lacks significant market power in the market in which it proposes to charge market-based rates. Until the carrier establishes that it lacks market power, these rates will be subject to the applicable ceiling level under § 342.3.

(c) Settlement rates. A carrier may change a rate without regard to the ceiling level under § 342.3 if the proposed change has been agreed to, in writing, by each person who, on the day of the filing of the proposed rate change, is using the service covered by the rate. A filing pursuant to this section must contain a verified statement by the carrier that the proposed rate change has been agreed to by all current shippers.

[Order 561, 58 FR 58779, Nov. 4, 1993, as amended at 59 FR 59146, Nov. 16, 1994]
Notes of Decisions
Cited in 13 cases (1 in the last 5 years), 1996–2024 · leading case: United Airlines, Inc. v. Fed. Energy Regulatory Comm'n, 827 F.3d 122 (D.C. Cir. 2016).
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United Airlines, Inc. v. Fed. Energy Regulatory Comm'n, 827 F.3d 122 (D.C. Cir. 2016). · cites it 4× “; see also 18 C.F.R. § 342.4 (a). “Second, whenever a pipeline can secure the agreement of all existing customers, it may file a rate change based on such a settlement.”
Ass'n of Oil Pipe Lines v. Fed. Energy Regulatory Comm'n, Kaneb Pipe Line Operating P'ship, L.P., Intervenors, 83 F.3d 1424 (D.C. Cir. 1996). · cites it 3× “”- 18 C.F.R. § 342.4 (a); see also Order No.”
Exxonmobil Oil Corp. v. Fed. Energy Regulatory Comm'n & United States of Am., W. Refining Co., L.P., Intervenors, 487 F.3d 945 (D.C. Cir. 2007). “A pipeline may charge a rate above the applicable cap only if there is a “substantial divergence” between the cap and its actual costs, if it shows that it lacks “significant market power,” or if all of its customers consent.”
Bp West Coast Prods., LLC v. Fed. Energy Regulatory Comm'n & United States of Am., Sfpp, L.P., Intervenors, 374 F.3d 1263 (D.C. Cir. 2004). “18 C.F.R. § 342.4 (a) (2004). Assuming that the Commission can explain its different treatment of rate litigation and reconditioning costs incurred in years after the 1994 test year, this may be a reasonable basis for denying recovery, but the Commission’s opinion provides no…”
Frontier Pipeline Co. v. Fed. Energy Regulatory Comm'n, 452 F.3d 774 (D.C. Cir. 2006). “18 C.F.R. § 342.4 ; Order No. 561, FERC Stats.”
the Crawford Fam. Farm P'ship v. TransCanada Keystone Pipeline, L. P., 409 S.W.3d 908 (Tex. App. 2013). “18 C.F.R. § 342.4 (2011); Christopher J. Barr, Unfinished Business: FERC’s Evolving Standard for Capacity Rights on Oil Pipelines, 32 Energy L.”
Mobil Pipe Line Co. v. Fed. Energy Regulatory Comm'n, 676 F.3d 1098 (D.C. Cir. 2012). · cites it 3× “See 18 C.F.R. §§ 342.4 (b), 348.1, 348.2. Market-based rates “can result in pricing that is both efficient and just and reasonable.”
Ass'n of Oil Pipe Lines v. Fed. Energy Regulatory Comm'n, 281 F.3d 239 (D.C. Cir. 2002). “561/561-A, a pipeline can file for “cost-of-service” rates based on its individualized costs if it “can demonstrate that there is a substantial divergence between the actual costs experienced by the pipeline and the indexed ceiling rate.”
Husky Mktg. & Supply Co. v. FERC, 105 F.4th 418 (D.C. Cir. 2024). “See 18 C.F.R. §§ 342.4 (b) & 348.1; see also Order No.”
BP W Coast Prod v. FERC (D.C. Cir. 2004). “18 C.F.R. § 342.4 (a) (2004). Assuming that the Commission can explain its different treatment of rate litiga- tion and reconditioning costs incurred in years after the 1994 test year, this may be a reasonable basis for denying recov- ery, but the Commission’s opinion provides…”
ExxonMobil Oil Corp v. FERC (D.C. Cir. 2007). “A pipeline may charge a rate above the applicable cap only if there is a “substantial divergence” between the cap and its actual costs, if it shows that it lacks “significant market power,” or if all of its customers consent.”
ExxonMobil Oil Corp. v. Fed. Energy Regulatory Comm'n, 363 F. App'x 752 (D.C. Cir. 2010). “See 18 C.F.R. § 342.4 (a). The shippers argued that SFPP’s rate adjustment fully compensated the pipeline for its annual cost increases such that an index-based increase on top of the new rate would be unjust or unreasonable.”
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