81 FR 94366 - Inquiry Regarding the Commission's Policy for Recovery of Income Tax Costs

DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission

Federal Register Volume 81, Issue 247 (December 23, 2016)

Page Range		94366-94370
FR Document		2016-30970
Following the decision of the U.S. Court of Appeals for the District of Columbia Circuit in United Airlines, Inc., et al. v. Federal Energy Regulatory Commission, 827 F.3d 122 (D.C. Cir. 2016), the Commission seeks comment regarding how to address any double recovery resulting from the Commission's current income tax allowance and rate of return policies.
Federal Register, Volume 81 Issue 247 (Friday, December 23, 2016)
[Federal Register Volume 81, Number 247 (Friday, December 23, 2016)]
[Notices]
[Pages 94366-94370]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30970]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PL17-1-000]


Inquiry Regarding the Commission's Policy for Recovery of Income 
Tax Costs

AGENCY:  Federal Energy Regulatory Commission, Department of Energy.

ACTION:  Notice of Inquiry.

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SUMMARY:  Following the decision of the U.S. Court of Appeals for the 
District of Columbia Circuit in United Airlines, Inc., et al. v. 
Federal Energy Regulatory Commission, 827 F.3d 122 (D.C. Cir. 2016), 
the Commission seeks comment regarding how to address any double 
recovery resulting from the Commission's current income tax allowance 
and rate of return policies.

DATES:  Initial Comments are due February 6, 2017, and Reply Comments 
are due February 27, 2017.

ADDRESSES:  Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
     Instructions: For detailed instructions on submitting 
comments, see the Comment Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT: 
Glenna Riley (Legal Information), Office of the General Counsel, 888 
First Street NE., Washington, DC 20426, (202) 502-8620, 
[email protected].

Andrew Knudsen (Legal Information), Office of the General Counsel, 888 
First Street NE., Washington, DC 20426, (202) 502-6527, 
[email protected].

James Sarikas (Technical Information), Office of Energy Markets 
Regulation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-6831, [email protected].

Scott Everngam (Technical Information), Office of Energy Markets 
Regulation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-6614, [email protected].


SUPPLEMENTARY INFORMATION: 
    1. The Commission seeks comments regarding how to address any 
double recovery resulting from the Commission's current income tax 
allowance and rate of return policies. This Notice of Inquiry (NOI) 
follows the U.S. Court of Appeals for the District of Columbia Circuit 
(D.C. Circuit) holding in United Airlines, Inc., et al. v. Federal 
Energy Regulatory Commission that the Commission failed to demonstrate 
that there is no double recovery of taxes for a partnership pipeline as 
a result of the income tax allowance and return on equity (ROE) 
determined pursuant to the discounted cash flow (DCF) methodology.\1\ 
Accordingly, the Court remanded the decisions to the Commission to 
develop a mechanism ``for which the Commission can demonstrate that 
there is no double recovery'' of partnership income tax costs.\2\
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    \1\ United Airlines Inc., et al. v. FERC, 827 F.3d 122, 134, 136 
(D.C. Cir. 2016) (United Airlines).
    \2\ Id. at 137.
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    2. The Commission recognizes the potentially significant and 
widespread effect of this holding upon the oil pipelines, natural gas 
pipelines, and electric utilities subject to the Commission's 
regulation. The importance of the income tax policy for partnership 
entities extends well-beyond the particular interests of the parties to 
the United Airlines proceeding. The Commission also recognizes that 
additional industry comment may provide further insight into the 
relationship between a partnership's income tax allowance and the 
Commission's DCF methodology. Accordingly, this NOI seeks further 
information as the Commission re-evaluates its policies following the 
United Airlines decision. Initial Comments are due February 6, 2017, 
and Reply Comments are due February 27, 2017.

I. Background

    3. This proceeding involves the relationship between the 
Commission's income tax allowance and ROE policies. Both have evolved 
in the past two decades to address the emergence of partnership 
entities in FERC-regulated industries, particularly Master Limited 
Partnerships (MLPs) that own oil and natural gas pipeline assets.\3\
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    \3\ See Composition of Proxy Groups for Determining Gas and Oil 
Pipeline Return on Equity, 123 FERC ] 61,048 (2008) (Proxy Group 
Policy Statement); Inquiry Regarding on Income Tax Allowances, 111 
FERC ] 61,139 (2005) (Income Tax Policy Statement).
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A. The MLP Business Model

    4. An MLP is a publicly traded partnership.\4\ In order to be 
treated as an MLP for Federal income tax purposes, an MLP must receive 
at least 90 percent of its income from certain qualifying sources, 
including natural gas and oil pipelines.\5\
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    \4\ The Internal Revenue Service defines a ``publicly traded 
partnership'' as any partnership if its interests are traded on an 
established securities market or are readily tradable on a secondary 
market or the substantial equivalent thereof. 26 U.S.C. 7704; 26 CFR 
1.7704-1.
    \5\ 26 U.S.C. 7704. Qualifying sources include natural resource 
activities such as exploration, development, mining or production, 
processing, refining, transportation, storage and marketing of any 
mineral or natural resource, including gas and oil. Id.
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    5. MLPs consist of a general partner, that manages the partnership, 
and limited partners, that provide capital and receive cash 
distributions. MLP limited partner units are traded on public 
exchanges, just like corporate stock shares.\6\ Based upon the MLP's 
partnership agreement, MLPs generally (a) distribute most ``available 
cash flow'' to the general and limited partners in the form of 
quarterly distributions, and, in a separate calculation, (b) allocate 
to the general and limited partners net partnership income for income 
tax purposes.\7\
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    \6\ Proxy Group Policy Statement, 123 FERC ]61,048 at P 10.
    \7\ Id. at P 11; Master Limited Partnership Association (MLPA), 
MLP-101, Basic Tax Principles, https://www.mlpassociation.org/mlp-101/basic-tax-principles/ (last visited Nov. 29, 2016) (MLPA Basic 
Tax Principles). Most MLP agreements define ``available cash flow'' 
as (1) net income (gross revenues minus operating expenses) plus (2) 
depreciation and amortization, minus (3) capital investments the 
partnership must make to maintain its current asset base and cash 
flow stream. Depreciation and amortization may be considered a part 
of ``available cash flow,'' because depreciation is an accounting 
charge against current income, rather than an actual cash expense. 
Thus, depreciation does not reduce the MLP's current cash on hand. 
Proxy Group Policy Statement, 123 FERC ]61,048 at P 11.

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[[Page 94367]]

    6. Quarterly cash distributions received by a partner are not 
equivalent to the partner's share of the MLP's taxable income. MLPs are 
pass-through entities and each partner is personally responsible for 
paying income taxes on the partnership's net taxable income.\8\ For tax 
purposes, the partnership agreement allocates to each partner a share 
of the partnership's taxable income.\9\ Deductions, including 
depreciation, losses, and credits, may substantially offset the taxable 
income. As a result, a partner may have no net taxable income in a 
given year.\10\
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    \8\ Income Tax Policy Statement, 111 FERC ]61,139 at P 33; MLPA 
Basic Tax Principles; see also ExxonMobil Oil Corp. v. FERC, 487 
F.3d 945, 954 (D.C. Cir. 2007) (ExxonMobil) (noting that ``investors 
in a limited partnership are required to pay tax on their 
distributive shares of the partnership income, even if they do not 
receive a cash distribution''). In contrast, corporations pay 
entity-level income taxes, and corporate dividends are second tier 
income to a common stock investor, not analogous to partnership 
distributions. SFPP, L.P., Opinion No. 511, 134 FERC ]61,121, at PP 
223, 253 (2011) (Opinion No. 511).
    \9\ The partner reports this taxable income and its components 
(e.g., gain, deductions, losses, credits) to the Internal Revenue 
Service on the K-1. See Dep't of Treasury, Internal Revenue Service, 
Partner's Instructions for Schedule K-1 (Form 1065) (2015), https://www.irs.gov/instructions/i1065sk1/index.html (IRS Instructions for 
K-1).
    \10\ Proxy Group Policy Statement, 123 FERC ]61,048 at P 14.
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    7. In contrast, the partner may receive a quarterly distribution 
whether or not it is allocated a positive net income tax liability for 
that period. The quarterly distributions are considered to be a return 
of capital, which reduces the partner's basis in the MLP units and is 
only taxed at the time of distribution if the partner's adjusted basis 
falls to zero.\11\ The investor's original basis (the price paid for 
the units) is adjusted downwards by cash distributions and allocations 
of deductions, and is adjusted upwards by allocations of income. When 
the units are sold, the taxable gain is the sales price minus the 
adjusted basis.\12\ The portion of the gain attributable to basis 
reductions for prior depreciation deductions is ``recaptured'' and 
taxed as ordinary income rather than capital gain.\13\
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    \11\ Id. P 15; MLPA Basic Tax Principles. Provided that the 
partner's adjusted basis is above zero, tax on distributions is 
deferred until the investor sells the units. If the basis falls to 
zero, future cash distributions are taxed as capital gain in the 
year received. MLPA Basic Tax Principles.
    \12\ MLPA Basic Tax Principles; IRS Instructions for K-1.
    \13\ MLPA Basic Tax Principles.
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B. Return on Equity Policies

    8. In Hope,\14\ the Supreme Court stated that ``the return to the 
equity owner should be commensurate with the return on investments in 
other enterprises having corresponding risks. That return, moreover, 
should be sufficient to assure confidence in the financial integrity of 
the enterprise, so as to maintain its credit and to attract capital.'' 
\15\ Since the 1980s, the Commission has used the DCF model to develop 
a range of returns earned on investments in companies with 
corresponding risks for purposes of determining the ROE for regulated 
entities.
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    \14\ Fed. Power Comm'n v. Hope Natural Gas Co., 320 U.S. 591 
(1944) (Hope).
    \15\ Id. at 603; see also Bluefield Waterworks & Improvement Co. 
v. Pub. Serv. Comm'n, 262 U.S. 679, 692-693 (1923); Duquesne Light 
Co. v. Barasch, 488 U.S. 299, 314 (1989).
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    9. Under the Commission's cost-of-service ratemaking methodology, 
the DCF model is used to determine a reasonable ROE that a regulated 
entity may recover in rates in addition to its costs. The purpose of 
the DCF methodology is to estimate the return required by investors in 
order to invest in the pipeline or utility whose rates are at 
issue.\16\ To do this, the DCF model considers the range of returns 
that the market provides investors in a proxy group of publicly-traded 
entities with similar risk profiles.\17\
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    \16\ Martha Coakley, Mass. Attorney Gen. v. Bangor Hydro-Elec. 
Co., Opinion No. 531, 147 FERC ]61,234, at P 14 (2014) (Opinion No. 
531).
    \17\ See Canadian Ass'n of Petroleum Producers v. FERC, 254 F.3d 
289, 293-294 (D.C. Cir. 2001).
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    10. The DCF model was originally developed as a method for 
investors to estimate the value of securities, including common stocks. 
It is based on the premise that ``a stock's price is equal to the 
present value of the infinite stream of expected dividends discounted 
at a market rate commensurate with the stock's risk.'' \18\ With 
simplifying assumptions, the DCF model results in the investor using 
the following formula to determine share price:
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    \18\ Id.; see also Proxy Group Policy Statement, 123 FERC 
]61,048 at P 58.

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P = D/(k-g)

where P is the price of the stock at the relevant time, D is the 
current dividend, k is the discount rate (or investors' required rate 
of return), and g is the expected growth rate in dividends. For 
ratemaking purposes, the Commission rearranges the DCF formula to solve 
for ``k'', the discount rate, which represents the rate of return that 
investors require to invest in the firm.\19\ Under the resulting DCF 
formula, the required rate of return is estimated to equal current 
dividend yield (dividends divided by share price) plus the projected 
future growth rate of dividends:
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    \19\ Opinion No. 531, 147 FERC ]61,234 at P 15. In contrast, 
``r'' represents the regulated entity's rate of return. Although the 
Commission has at times used the terms ``r'' and ``k'' 
interchangeably, the Commission intends to apply these terms more 
precisely and requests that the participants in this proceeding do 
so also unless quoting a prior Commission order.

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k = D/P + g

    11. The Commission compares the returns of proxy group entities on 
an after-entity-level-tax basis, rather than before-tax basis, because 
most comparable securities trade on the basis of an entity's after-tax 
return on its public utility income.\20\ Based typically upon the 
median of the range of returns in the proxy group, the Commission 
determines the regulated entity's allowed ROE,\21\ although the ROE may 
sometimes be adjusted upwards or downwards within the zone of 
reasonableness.\22\
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    \20\ Brief of Respondent Federal Energy Regulatory Commission, 
at 8, Case No. 11-1479 (D.C. Cir., filed Feb. 5, 2016).
    \21\ See Southern California Edison Co. v. FERC, 717 F.3d 177, 
182-183 (D.C. Cir. 2013).
    \22\ See, e.g., Opinion No. 531, 147 FERC ]61,234 at PP 150-151. 
The zone of reasonableness is defined by the low and high estimates 
of the market cost of equity for the members of the proxy group. Id. 
P 23.
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    12. The Commission's proxy group criteria is based on the principle 
that entities included in the proxy group must be of comparable risk to 
the firm whose ROE is being determined in a particular rate 
proceeding.\23\ As entities narrowly focused on providing oil and 
natural gas pipeline transportation have increasingly adopted the MLP 
business form, the Commission has included MLPs in the proxy group for 
natural gas and oil pipelines because those MLPs are likely more 
representative of predominantly pipeline firms than the diversified 
corporations otherwise available for inclusion in a proxy group.\24\ 
The Commission uses the same DCF analysis for MLPs as for corporations, 
except that the Commission uses a lower long-term growth projection for 
MLPs than for corporations.\25\ The Commission concluded that an MLP's 
quarterly distributions could be used to measure cash flows from the 
investment without any adjustment to remove return of

[[Page 94368]]

capital.\26\ The Commission explained that ``since the DCF model uses 
the total unadjusted cash flows to determine the stock's value, it is 
theoretically inconsistent [with the DCF model] to use lower adjusted 
cash flows when using the DCF model to determine the return required by 
investors purchasing the stock.'' \27\
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    \23\ Petal Gas Storage, L.L.C. v. FERC, 496 F.3d 695, 699 (D.C. 
Cir. 2007) (Petal); Proxy Group Policy Statement, 123 FERC ] 61,048 
at PP 24, 29.
    \24\ See Proxy Group Policy Statement, 123 FERC ]61,048 at PP 
47-50.
    \25\ The long-term growth projection for corporations is 
projected growth in Gross Domestic Product (GDP) and for MLPs one 
half that projection. Id. P 106.
    \26\ See Id. PP 57-63.
    \27\ See Id. P 58.
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C. Income Tax Policy

    13. In May 2005, the Commission issued an Income Tax Policy 
Statement \28\ permitting an income tax allowance for all regulated 
entities (including corporations and partnerships), provided that the 
owners can show an actual or potential income tax liability to be paid 
on income from the regulated assets. The Commission continued its 
longstanding policy of permitting corporations to recover an income tax 
allowance because corporations themselves incur a corporate income tax 
liability. The Commission reasoned that while a partnership or other 
pass-through entity does not pay taxes, the partners incur an income 
tax liability on the partnership income. Accordingly, those income tax 
costs are appropriately included in rates.\29\ The D.C. Circuit upheld 
this policy, in ExxonMobil,\30\ explaining that the income tax 
liability of partners is attributable to the regulated entity and may 
be recovered in pipeline rates, provided that the partners have an 
actual or potential income tax liability.\31\
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    \28\ See Income Tax Policy Statement, 111 FERC ]61,139. The 
Policy Statement was issued in response to BP West Coast Products, 
LLC v. FERC, 374 F.3d 1263 (DC Cir. 2004) (BP West Coast). That 
decision held that the Commission failed to justify its then 
existing policy of affording partnership entities an income tax 
allowance for income attributable to interests held by corporations, 
but not for income attributable to interests held by individuals.
    \29\ Id. P 34.
    \30\ ExxonMobil, 487 F.3d 945.
    \31\ Id. at 953-955.
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    14. In July 2016, in United Airlines,\32\ the D.C. Circuit, 
reviewing a series of orders involving SFPP, L.P.,\33\ held that the 
Commission failed to demonstrate that there is no double recovery of 
taxes for a partnership pipeline as a result of awarding that pipeline 
both an income tax allowance and a pre-investor-tax ROE pursuant to the 
DCF methodology.\34\ The Court upheld ExxonMobil's finding that a 
pipeline may recover partnership income tax costs so long as the 
partners have an actual or potential income tax liability,\35\ but 
concluded that allowing partnerships to double recover those tax costs 
would be inconsistent with the Supreme Court's mandate in Hope.\36\
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    \32\ United Airlines, 827 F.3d 122.
    \33\ Opinion No. 511, 134 FERC ]61,121, order on reh'g, Opinion 
No. 511-A, 137 FERC ]61,220 (2011), order on reh'g, Opinion No. 511-
B, 150 FERC ]61,096 (2015).
    \34\ United Airlines, 827 F.3d at 134, 136.
    \35\ Id. at 135 (citing ExxonMobil, 487 F.3d at 954-955); id. at 
137.
    \36\ Id. at 137 (citing Hope, 320 U.S. at 603).
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    15. The Court remanded the decisions to the Commission to develop a 
mechanism ``for which the Commission can demonstrate that there is no 
double recovery'' of partnership income tax costs.\37\ The Court noted 
that the Commission may consider the options of removing any 
duplicative tax recovery for partnerships directly from the DCF ROE, or 
eliminating all income tax allowances and setting rates based on pre-
tax returns.\38\
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    \37\ Id.
    \38\ Id. As noted by the Court, the Commission previously 
considered the option of setting rates based on pre-investor level 
and pre-entity level tax returns in its 2005 policy statement and 
concluded this approach would be impracticable. See Income Tax 
Policy Statement, 111 FERC ]61,139 at P 40.
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    16. The Court also directed the Commission to ensure parity between 
equity owners in partnership and corporate pipelines.\39\ The Court did 
not find persuasive the Commission's argument that ``any disparate 
treatment between partners in partnership pipelines and shareholders in 
corporate pipelines is the result of the Internal Revenue Code, not 
FERC's tax allowance policy.'' \40\
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    \39\ United Airlines, 827 F.3d at 137.
    \40\ Id. at 136; see also BP West Coast, 374 F.3d at 1293 (``The 
mandate of Congress in the tax amendment was exhausted when the 
pipeline limited partnership was exempted from corporate taxation. 
It did not empower FERC to do anything, let alone to create an 
allowance for fictitious taxes.'').
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II. Commission Questions

    17. The Commission seeks comment regarding methods to allow 
regulated entities to earn an adequate return consistent with Hope \41\ 
that do not result in a double recovery of investor-level taxes for 
partnerships or similar pass-through entities.
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    \41\ 320 U.S. at 603.
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    18. Comments should consider the fundamental concerns presented by 
United Airlines and shipper litigants that permitting a partnership 
entity to have an income tax allowance results in a double recovery of 
investor-level tax costs because:

     The DCF methodology estimates the rate of return that 
an investor requires in order to invest in the regulated entity.\42\
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    \42\ United Airlines, 827 F.3d at 136; Opinion No. 531, 147 FERC 
] 61,234 at P 14.
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     As a general matter, potential investors evaluate 
whether to invest in an entity based on the returns they expect to 
receive after paying any applicable taxes on the investment 
income,\43\ and thus, to attract capital, entities in the market 
must provide investors a return that covers investor-level taxes and 
leaves sufficient remaining income to earn their required after-tax 
return.\44\
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    \43\ Kern River Gas Transmission Co., Opinion 486-B, 126 FERC ] 
61,034, at P 114 (2009) (``investors invest on the basis of after-
tax returns and price an instrument accordingly'').
    \44\ United Airlines, 827 F.3d at 136. In finding that ``the 
[DCF ROE] determines the pre-tax investor return required to attract 
investment, irrespective of whether the regulated entity is a 
partnership or a corporate pipeline,'' the Court relied on Opinion 
No. 511, 134 FERC ] 61,121 at PP 243, 244, which included the 
following example:
    The investor desires a 6 percent after-tax return and has a 25 
percent marginal tax rate. Thus, the security must have an ROE of 8 
percent to achieve an after-tax yield of 6 percent. Assume that the 
distribution or dividend is $8. The investor will price the security 
at $100. Conversely, if the security price is $100 and the yield is 
$8, the Commission determines that the required return is 8 percent. 
If the dollar distribution increases to $10, the investor will price 
the security at $125 because $10 is 8 percent of $125. The 
Commission would note that the security price is $125 and that the 
yield is $10, or a return of 8 percent. If the distribution is $6, 
the security price will drop to $75, a return of 8 percent. The 
Commission would observe a $75 dollar security price, a $6 yield, 
and a return of 8 percent. In all cases the ROE is 8 percent and the 
after-tax return is 6 percent based on the market-established 
return.
    Although the concept may be more complex for an MLP, this 
proposition is also evidenced in the fact that the yields on bonds 
that pay taxable interest income are higher than the yields on bonds 
of state and local governments that pay tax-exempt income. Joint 
Initial Brief of Shipper Petitioners, at 20, Case No. 11-1479 (D.C. 
Cir., filed Feb. 5, 2016).
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     Because the return estimated by the DCF methodology 
includes the cash flow necessary to cover investors' income tax 
liabilities and earn a sufficient after-tax return, the Commission's 
policy of allowing partnership entities to recover a separate income 
tax allowance may result in a double recovery.\45\
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    \45\ United Airlines, 827 F.3d at 137 (remanding for the 
Commission to consider ``mechanisms for which the Commission can 
demonstrate that there is no double recovery'').
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     While allowing a partnership entity to recover the 
partner-investors' tax costs is reasonable,\46\ allowing a 
partnership to double recover those tax costs is not.\47\
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    \46\ Id. at 135, 137 (noting that the Commission had a reasoned 
basis for granting an income tax allowance to partnership 
pipelines); ExxonMobil, 487 F.3d at 951-953 (concluding that the 
Commission provided a reasonable justification for its policy of 
allowing partnership pipelines an income tax allowance to the extent 
that the partners incur actual or potential tax liability); see also 
City of Charlottesville v. FERC, 774 F.2d 1205, 1207 (D.C. Cir. 
1985) (``cost-of-service ratemaking principles'' require ``rates 
yielding sufficient revenue to cover all proper costs, including 
federal income taxes, plus a specified return on invested 
capital''); BP West Coast, 374 F.3d 1263 at 1286 (``There is no 
question that as a general proposition a pipeline that pays income 
taxes is entitled to recover the costs of the taxes paid from its 
ratepayers''); Pub. Serv. Comm'n of N.M. v. FERC, 653 F.2d 681, 683 
(D.C. Cir. 1981).
    \47\ United Airlines, 827 F.3d at 136 (finding that ``[b]ecause 
the Supreme Court has instructed that `the return to the equity 
owner should be commensurate with returns on investments in other 
enterprises having corresponding risks,' FERC has not shown that the 
resulting rates under FERC's current policy are `just and 
reasonable.' '') (quoting Hope, 320 U.S. at 603).

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[[Page 94369]]

     Changes in the share price do not resolve the double 
recovery issue. MLP investors will demand the same percentage return 
on the share price whether or not a pipeline receives an income tax 
allowance. If an MLP obtains a new revenue source that increases its 
distributions to investors (such as an income tax allowance that 
increases its rates), the share price will rise until, once again, 
the investor receives the cash flow necessary to cover investors' 
income tax liabilities and earn a sufficient after-tax return.\48\
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    \48\ Opinion No. 511, 134 FERC ] 61,121 at PP 243-44; Joint 
Initial Brief of Shipper Petitioners, at 34-35, 39-40, Case No. 11-
1479 (D.C. Cir., Feb. 5, 2016); id. at Attachment 3 (SFP-98 and SFP-
99); Proxy Group Policy Statement, 123 FERC ] 61,048 at P 58 
(``under the DCF model, all cash flows, whatever their source, 
contribute to the value of stock''); see also United Airlines, 827 
F.3d at 136-137. Although the Court did not directly address this 
particular aspect of the Shippers' argument, the Shippers have 
repeatedly raised it in their claims that this income results in a 
double recovery. See Opinion No. 511, 134 FERC ] 61,121 at PP 238-
239. Further, citing to the same passage in Opinion No. 511 as the 
Shippers, the Court did acknowledge that ``the [DCF ROE] determines 
the pre-tax investor return required to attract investment, 
irrespective of whether the regulated entity is a partnership or a 
corporate pipeline.'' United Airlines, 827 F.3d at 136 (citing 
Opinion No. 511, 134 FERC ] 61,121 at PP 243-244).
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     As opposed to an MLP pipeline, the double recovery 
issue does not arise for a corporation's income tax allowance. The 
corporation pays its corporate income taxes itself. Accordingly, 
although a return to investors must cover investor-level taxes and 
sufficient remaining income to earn their required after-tax return, 
the corporate income tax is not an investor level tax.\49\ Thus, the 
corporate income tax cost recovered in the income tax allowance is 
not reflected in the return estimated by the DCF methodology.\50\
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    \49\ Income Tax Policy Statement, 111 FERC ] 61,139 at P 38.
    \50\ United Airlines, 827 F.3d at 136 (finding that ``unlike a 
corporate pipeline, a partnership pipeline incurs no taxes, except 
those imputed from its partners, at the entity level'' and that the 
facts ``support the conclusion that granting a tax allowance to 
partnership pipelines results in inequitable returns for partners in 
those pipelines as compared to shareholders in corporate 
pipelines.'').

    19. In light of the above, the Commission invites comments 
regarding any proposed methods to adjust the income tax allowance 
policy or current ROE policies to resolve any double recovery of 
investor-level tax costs for partnerships or similar pass-through 
entities. Comments should provide a detailed explanation of any 
proposal, including evidentiary support and how any adjustment to the 
Commission's tax allowance and/or ROE policies should be specifically 
implemented. Comments should explain how the proposed approach would 
(a) resolve any double recovery of investor-level income tax costs for 
partnership entities, and (b) allow regulated entities to earn a 
sufficient return consistent with the capital attraction standard in 
Hope.\51\ Comments should support any proposed methods with data, 
theoretical analyses, empirical studies, or any other evidence relevant 
to demonstrating the level of partner-investor tax costs reflected in 
the ROE estimated by the DCF methodology. Comments should address how 
these proposals apply to publically traded pass-through entities, such 
as MLPs and real estate investment trusts (REITS), as well other pass 
through entities, including closely held partnerships and joint 
ventures.
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    \51\ 320 U.S. at 603.
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    20. Comments should also address the practical application of their 
proposals. For example, to the extent a commenter advocates eliminating 
the income tax allowance for partnerships and relying on the ROE 
awarded the pipeline for the recovery of investor-level tax costs, its 
comments should address whether any changes to the Commission's ROE 
policies are necessary to ensure that the ROE reflects appropriate tax 
costs for the particular entity whose rates are at issue.\52\ 
Alternatively, commenters could propose reducing the DCF return to 
remove all investor-level tax costs and rely on an income tax allowance 
to recover the investor-level tax costs. Commenters advocating this 
latter approach should explain how an adjustment to the DCF return 
could be made to remove investor-level tax costs for each entity in the 
DCF proxy group.\53\ In addition, those commenters should describe how 
to determine the level of the income tax allowance for partnership 
entities.\54\ As stated above, commenters should ensure that their 
proposals do not result in a double recovery of investor level income 
tax costs for partnership entities as required by United Airlines.
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    \52\ For example, investors in an MLP incur different investor-
level taxes than investors in a corporation. Commenters could 
propose adjustments to equalize the after-investor-level tax returns 
for each entity in the proxy group or explain why such adjustments 
are not necessary. Alternatively, commenters could propose a means 
for including only entities in the proxy group that incur similar 
investor-level tax costs. To the extent any commenter advocates the 
latter approach, that commenter should address how the composition 
of the proxy group and the availability of companies for the proxy 
group in a given rate case could be affected if the composition of 
the proxy group is changed to account for the different investor-
level taxes of different business forms. See Petal, 496 F.3d 695 at 
698-700; Proxy Group Policy Statement, 123 FERC ] 61,048 at P 9 
(explaining that an insufficient number of pipelines using the 
corporate business form are available for the formation of a natural 
gas pipeline proxy group).
    \53\ See n.52.
    \54\ Currently, the Commission uses the weighted marginal tax 
rate of the MLP's partners. Income Tax Policy Statement, 111 FERC ] 
61,139 at P 32; SFPP, L.P., 121 FERC ] 61,240, at P 35 (2007).
---------------------------------------------------------------------------

III. Procedure for Comments

    21. The Commission invites interested persons to submit written 
comments on the issue identified in this Notice of Inquiry as discussed 
above. Comments are due February 6, 2017 and reply comments are due 
February 27, 2017. Comments must refer to Docket No. PL17-1-000, and 
must include the commenter's name, the organization it represents, if 
applicable, and its address. To facilitate the Commission's review of 
the comments, commenters are requested to provide an executive summary 
of their position. Additional issues the commenters wish to raise 
should be identified separately. The commenters should double space 
their comments.
    22. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    23. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    24. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

IV. Document Availability

    25. The Commission provides all interested persons an opportunity 
to view and/or print the contents of this document via the Internet 
through the Commission's Home Page (http://www.ferc.gov) and in the 
Commission's Public Reference Room during normal business hours (8:30 
a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    26. From the Commission's Home Page on the Internet, this 
information is available in the Commission's document management 
system, eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word

[[Page 94370]]

format for viewing, printing, and/or downloading. To access this 
document in eLibrary, type the docket number (excluding the last three 
digits) in the docket number field.
    27. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours. For assistance, please contact 
the Commission's Online Support at 1-866-208-3676 (toll free) or 202-
502-6652 (email at [email protected]) or the Public Reference 
Room at 202-502-8371, TTY 202-502-8659 (email at 
[email protected]).

    By direction of the Commission.

    Issued: December 15, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-30970 Filed 12-22-16; 8:45 am]
BILLING CODE 6717-01-P
94366 Federal Register / Vol. 81, No. 247 / Friday, December 23, 2016 / Notices

copies can be viewed and reproduced at Glenna Riley (Legal Information), Office evaluates its policies following the
the Commission in its Public Reference of the General Counsel, 888 First United Airlines decision. Initial
Room, Room 2A, 888 First Street NE., Street NE., Washington, DC 20426, Comments are due February 6, 2017,
Washington, DC 20426. The filing may (202) 502–8620, Glenna.Riley@ and Reply Comments are due February
also be viewed on the web at http:// ferc.gov. 27, 2017.
www.ferc.gov/docs-filing/elibrary.asp Andrew Knudsen (Legal Information), I. Background
using the ‘‘eLibrary’’ link. Enter the Office of the General Counsel, 888
docket number (e.g., CD17–1–000) in First Street NE., Washington, DC 3. This proceeding involves the
the docket number field to access the 20426, (202) 502–6527, relationship between the Commission’s
document. For assistance, call toll-free Andrew.Knudsen@ferc.gov. income tax allowance and ROE policies.
1–866–208–3676 or email Both have evolved in the past two
James Sarikas (Technical Information),
FERCOnlineSupport@ferc.gov. For TTY, decades to address the emergence of
Office of Energy Markets Regulation,
call (202) 502–8659. partnership entities in FERC-regulated
Federal Energy Regulatory
industries, particularly Master Limited
Dated: December 15, 2016. Commission, 888 First Street NE.,
Partnerships (MLPs) that own oil and
Kimberly Bose, Washington, DC 20426, (202) 502–
natural gas pipeline assets.3
Secretary. 6831, James.Sarikas@ferc.gov.
[FR Doc. 2016–30933 Filed 12–22–16; 8:45 am] Scott Everngam (Technical Information), A. The MLP Business Model
BILLING CODE 6717–01–P
Office of Energy Markets Regulation, 4. An MLP is a publicly traded
Federal Energy Regulatory partnership.4 In order to be treated as an
Commission, 888 First Street NE., MLP for Federal income tax purposes,
DEPARTMENT OF ENERGY Washington, DC 20426, (202) 502– an MLP must receive at least 90 percent
6614, Scott.Everngam@ferc.gov. of its income from certain qualifying
Federal Energy Regulatory SUPPLEMENTARY INFORMATION: sources, including natural gas and oil
Commission 1. The Commission seeks comments pipelines.5
regarding how to address any double 5. MLPs consist of a general partner,
[Docket No. PL17–1–000] recovery resulting from the that manages the partnership, and
Commission’s current income tax limited partners, that provide capital
Inquiry Regarding the Commission’s and receive cash distributions. MLP
allowance and rate of return policies.
Policy for Recovery of Income Tax limited partner units are traded on
This Notice of Inquiry (NOI) follows the
Costs public exchanges, just like corporate
U.S. Court of Appeals for the District of
AGENCY: Federal Energy Regulatory Columbia Circuit (D.C. Circuit) holding stock shares.6 Based upon the MLP’s
Commission, Department of Energy. in United Airlines, Inc., et al. v. Federal partnership agreement, MLPs generally
ACTION: Notice of Inquiry. Energy Regulatory Commission that the (a) distribute most ‘‘available cash flow’’
Commission failed to demonstrate that to the general and limited partners in
SUMMARY: Following the decision of the there is no double recovery of taxes for the form of quarterly distributions, and,
U.S. Court of Appeals for the District of a partnership pipeline as a result of the in a separate calculation, (b) allocate to
Columbia Circuit in United Airlines, income tax allowance and return on the general and limited partners net
Inc., et al. v. Federal Energy Regulatory equity (ROE) determined pursuant to partnership income for income tax
Commission, 827 F.3d 122 (D.C. Cir. the discounted cash flow (DCF) purposes.7
2016), the Commission seeks comment methodology.1 Accordingly, the Court
3 See Composition of Proxy Groups for
regarding how to address any double remanded the decisions to the
Determining Gas and Oil Pipeline Return on Equity,
recovery resulting from the Commission to develop a mechanism 123 FERC ¶ 61,048 (2008) (Proxy Group Policy
Commission’s current income tax ‘‘for which the Commission can Statement); Inquiry Regarding on Income Tax
allowance and rate of return policies. demonstrate that there is no double Allowances, 111 FERC ¶ 61,139 (2005) (Income Tax
recovery’’ of partnership income tax Policy Statement).
DATES: Initial Comments are due 4 The Internal Revenue Service defines a
February 6, 2017, and Reply Comments costs.2
‘‘publicly traded partnership’’ as any partnership if
are due February 27, 2017. 2. The Commission recognizes the its interests are traded on an established securities
potentially significant and widespread market or are readily tradable on a secondary
ADDRESSES: Comments, identified by
effect of this holding upon the oil market or the substantial equivalent thereof. 26
docket number, may be filed in the U.S.C. 7704; 26 CFR 1.7704–1.
pipelines, natural gas pipelines, and
following ways: 5 26 U.S.C. 7704. Qualifying sources include
electric utilities subject to the
• Electronic Filing through http:// natural resource activities such as exploration,
Commission’s regulation. The development, mining or production, processing,
www.ferc.gov. Documents created
importance of the income tax policy for refining, transportation, storage and marketing of
electronically using word processing any mineral or natural resource, including gas and
partnership entities extends well-
software should be filed in native oil. Id.
beyond the particular interests of the
applications or print-to-PDF format and 6 Proxy Group Policy Statement, 123 FERC
parties to the United Airlines
not in a scanned format. ¶61,048 at P 10.
proceeding. The Commission also
• Mail/Hand Delivery: Those unable 7 Id. at P 11; Master Limited Partnership

recognizes that additional industry Association (MLPA), MLP–101, Basic Tax
to file electronically may mail or hand- Principles, https://www.mlpassociation.org/mlp-
comment may provide further insight
deliver comments to: Federal Energy 101/basic-tax-principles/ (last visited Nov. 29,
into the relationship between a
Regulatory Commission, Secretary of the 2016) (MLPA Basic Tax Principles). Most MLP
mstockstill on DSK3G9T082PROD with NOTICES

partnership’s income tax allowance and agreements define ‘‘available cash flow’’ as (1) net
Commission, 888 First Street NE.,
the Commission’s DCF methodology. income (gross revenues minus operating expenses)
Washington, DC 20426. plus (2) depreciation and amortization, minus (3)
Accordingly, this NOI seeks further
• Instructions: For detailed capital investments the partnership must make to
information as the Commission re-
instructions on submitting comments, maintain its current asset base and cash flow
see the Comment Procedures Section of stream. Depreciation and amortization may be
1 United Airlines Inc., et al. v. FERC, 827 F.3d
considered a part of ‘‘available cash flow,’’ because
this document. 122, 134, 136 (D.C. Cir. 2016) (United Airlines). depreciation is an accounting charge against current
FOR FURTHER INFORMATION CONTACT: 2 Id. at 137. income, rather than an actual cash expense. Thus,

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94368 Federal Register / Vol. 81, No. 247 / Friday, December 23, 2016 / Notices

capital.26 The Commission explained may recover partnership income tax on the returns they expect to receive after
that ‘‘since the DCF model uses the total costs so long as the partners have an paying any applicable taxes on the
unadjusted cash flows to determine the actual or potential income tax investment income,43 and thus, to attract
capital, entities in the market must provide
stock’s value, it is theoretically liability,35 but concluded that allowing
investors a return that covers investor-level
inconsistent [with the DCF model] to partnerships to double recover those tax taxes and leaves sufficient remaining income
use lower adjusted cash flows when costs would be inconsistent with the to earn their required after-tax return.44
using the DCF model to determine the Supreme Court’s mandate in Hope.36 • Because the return estimated by the DCF
return required by investors purchasing 15. The Court remanded the decisions methodology includes the cash flow
the stock.’’ 27 to the Commission to develop a necessary to cover investors’ income tax
mechanism ‘‘for which the Commission liabilities and earn a sufficient after-tax
C. Income Tax Policy can demonstrate that there is no double return, the Commission’s policy of allowing
13. In May 2005, the Commission recovery’’ of partnership income tax partnership entities to recover a separate
issued an Income Tax Policy costs.37 The Court noted that the income tax allowance may result in a double
Statement 28 permitting an income tax recovery.45
Commission may consider the options • While allowing a partnership entity to
allowance for all regulated entities of removing any duplicative tax recover the partner-investors’ tax costs is
(including corporations and recovery for partnerships directly from reasonable,46 allowing a partnership to
partnerships), provided that the owners the DCF ROE, or eliminating all income double recover those tax costs is not.47
can show an actual or potential income tax allowances and setting rates based
tax liability to be paid on income from on pre-tax returns.38 43 Kern River Gas Transmission Co., Opinion

the regulated assets. The Commission 16. The Court also directed the 486–B, 126 FERC ¶ 61,034, at P 114 (2009)
continued its longstanding policy of Commission to ensure parity between (‘‘investors invest on the basis of after-tax returns
and price an instrument accordingly’’).
permitting corporations to recover an equity owners in partnership and 44 United Airlines, 827 F.3d at 136. In finding that
income tax allowance because corporate pipelines.39 The Court did not ‘‘the [DCF ROE] determines the pre-tax investor
corporations themselves incur a find persuasive the Commission’s return required to attract investment, irrespective of
corporate income tax liability. The argument that ‘‘any disparate treatment whether the regulated entity is a partnership or a
Commission reasoned that while a between partners in partnership corporate pipeline,’’ the Court relied on Opinion
No. 511, 134 FERC ¶ 61,121 at PP 243, 244, which
partnership or other pass-through entity pipelines and shareholders in corporate included the following example:
does not pay taxes, the partners incur an pipelines is the result of the Internal The investor desires a 6 percent after-tax return
income tax liability on the partnership Revenue Code, not FERC’s tax and has a 25 percent marginal tax rate. Thus, the
income. Accordingly, those income tax allowance policy.’’ 40 security must have an ROE of 8 percent to achieve
costs are appropriately included in an after-tax yield of 6 percent. Assume that the
II. Commission Questions distribution or dividend is $8. The investor will
rates.29 The D.C. Circuit upheld this price the security at $100. Conversely, if the
policy, in ExxonMobil,30 explaining that 17. The Commission seeks comment security price is $100 and the yield is $8, the
the income tax liability of partners is regarding methods to allow regulated Commission determines that the required return is
attributable to the regulated entity and entities to earn an adequate return 8 percent. If the dollar distribution increases to $10,
consistent with Hope 41 that do not the investor will price the security at $125 because
may be recovered in pipeline rates, $10 is 8 percent of $125. The Commission would
provided that the partners have an result in a double recovery of investor- note that the security price is $125 and that the
actual or potential income tax level taxes for partnerships or similar yield is $10, or a return of 8 percent. If the
liability.31 pass-through entities. distribution is $6, the security price will drop to
18. Comments should consider the $75, a return of 8 percent. The Commission would
14. In July 2016, in United Airlines,32 observe a $75 dollar security price, a $6 yield, and
the D.C. Circuit, reviewing a series of fundamental concerns presented by a return of 8 percent. In all cases the ROE is 8
orders involving SFPP, L.P.,33 held that United Airlines and shipper litigants percent and the after-tax return is 6 percent based
the Commission failed to demonstrate that permitting a partnership entity to on the market-established return.
that there is no double recovery of taxes have an income tax allowance results in Although the concept may be more complex for
a double recovery of investor-level tax an MLP, this proposition is also evidenced in the
for a partnership pipeline as a result of fact that the yields on bonds that pay taxable
awarding that pipeline both an income costs because: interest income are higher than the yields on bonds
tax allowance and a pre-investor-tax • The DCF methodology estimates the rate of state and local governments that pay tax-exempt
of return that an investor requires in order to income. Joint Initial Brief of Shipper Petitioners, at
ROE pursuant to the DCF 20, Case No. 11–1479 (D.C. Cir., filed Feb. 5, 2016).
methodology.34 The Court upheld invest in the regulated entity.42 45 United Airlines, 827 F.3d at 137 (remanding for
ExxonMobil’s finding that a pipeline • As a general matter, potential investors
the Commission to consider ‘‘mechanisms for
evaluate whether to invest in an entity based
which the Commission can demonstrate that there
26 See Id. PP 57–63. is no double recovery’’).
35 Id. at 135 (citing ExxonMobil, 487 F.3d at 954– 46 Id. at 135, 137 (noting that the Commission had
27 See Id. P 58.
28 See Income Tax Policy Statement, 111 FERC
955); id. at 137. a reasoned basis for granting an income tax
36 Id. at 137 (citing Hope, 320 U.S. at 603).
¶61,139. The Policy Statement was issued in allowance to partnership pipelines); ExxonMobil,
37 Id.
response to BP West Coast Products, LLC v. FERC, 487 F.3d at 951–953 (concluding that the
374 F.3d 1263 (DC Cir. 2004) (BP West Coast). That
38 Id. As noted by the Court, the Commission Commission provided a reasonable justification for
decision held that the Commission failed to justify previously considered the option of setting rates its policy of allowing partnership pipelines an
its then existing policy of affording partnership based on pre-investor level and pre-entity level tax income tax allowance to the extent that the partners
entities an income tax allowance for income returns in its 2005 policy statement and concluded incur actual or potential tax liability); see also City
this approach would be impracticable. See Income of Charlottesville v. FERC, 774 F.2d 1205, 1207
attributable to interests held by corporations, but
Tax Policy Statement, 111 FERC ¶61,139 at P 40. (D.C. Cir. 1985) (‘‘cost-of-service ratemaking
not for income attributable to interests held by 39 United Airlines, 827 F.3d at 137.
individuals. principles’’ require ‘‘rates yielding sufficient
40 Id. at 136; see also BP West Coast, 374 F.3d at revenue to cover all proper costs, including federal
mstockstill on DSK3G9T082PROD with NOTICES

29 Id. P 34.
30 ExxonMobil, 487 F.3d 945.
1293 (‘‘The mandate of Congress in the tax income taxes, plus a specified return on invested
amendment was exhausted when the pipeline capital’’); BP West Coast, 374 F.3d 1263 at 1286
31 Id. at 953–955.
limited partnership was exempted from corporate (‘‘There is no question that as a general proposition
32 United Airlines, 827 F.3d 122.
taxation. It did not empower FERC to do anything, a pipeline that pays income taxes is entitled to
33 Opinion No. 511, 134 FERC ¶61,121, order on let alone to create an allowance for fictitious recover the costs of the taxes paid from its
reh’g, Opinion No. 511–A, 137 FERC ¶61,220 taxes.’’). ratepayers’’); Pub. Serv. Comm’n of N.M. v. FERC,
(2011), order on reh’g, Opinion No. 511–B, 150 41 320 U.S. at 603. 653 F.2d 681, 683 (D.C. Cir. 1981).
FERC ¶61,096 (2015). 42 United Airlines, 827 F.3d at 136; Opinion No. 47 United Airlines, 827 F.3d at 136 (finding that
34 United Airlines, 827 F.3d at 134, 136. 531, 147 FERC ¶ 61,234 at P 14. ‘‘[b]ecause the Supreme Court has instructed that

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94370 Federal Register / Vol. 81, No. 247 / Friday, December 23, 2016 / Notices

format for viewing, printing, and/or recommendations of the subcommittee SUMMARY: The Environmental Protection
downloading. To access this document and LGAC workgroups including a draft Agency (EPA) is announcing the
in eLibrary, type the docket number LGAC Biannual Report; and availability of Draft Field-Based
(excluding the last three digits) in the environmental and public health issues. Methods for Developing Aquatic Life
docket number field. This is an open meeting and all Criteria for Specific Conductivity for
27. User assistance is available for interested persons are invited to public comment. Elevated ionic
eLibrary and the Commission’s Web site participate. The Committee will hear concentration measured as specific
during normal business hours. For comments from the public between conductivity has been shown to
assistance, please contact the 12:45 p.m.–1:00 p.m. (ET) on Friday, negatively impact aquatic life in a range
Commission’s Online Support at 1–866– January 13, 2017. Individuals or of freshwater resources. Once finalized,
208–3676 (toll free) or 202–502–6652 organizations wishing to address the states and authorized tribes located in
(email at FERCOnlineSupport@ferc.gov) Committee will be allowed a maximum any region of the country may use the
or the Public Reference Room at 202– of five minutes to present their point of methods to develop field-based
502–8371, TTY 202–502–8659 (email at view. Also, written comments should be conductivity criteria for flowing waters.
public.referenceroom@ferc.gov). submitted electronically to This document does not impose binding
By direction of the Commission. eargle.frances@epa.gov. Please contact water quality criteria on any state, but
the Designated Federal Officer (DFO) at instead provides methods to assist states
Issued: December 15, 2016.
the number listed below to schedule a and tribes that seek to develop such
Nathaniel J. Davis, Sr.,
time on the agenda. Time will be criteria for adoption into their water
Deputy Secretary. quality standards. The draft document
allotted on a first-come first-serve basis,
[FR Doc. 2016–30970 Filed 12–22–16; 8:45 am] provides a scientific assessment of
and the total period for comments may
BILLING CODE 6717–01–P
be extended if the number of requests ecological effects and is not a regulation.
for presentations requires it. Following closure of this 60-day public
comment period, EPA will consider the
ADDRESSES: EPA’s Local Government
ENVIRONMENTAL PROTECTION comments, revise the document, as
Advisory Committee meetings will be
AGENCY appropriate, and then publish a final
held via teleconference. Meeting
document that will provide methods for
[FRL–9957–34–OA] summaries will be available after the
states and authorized tribes that they
meeting online at www.epa.gov/ocir/
Meetings of the Local Government may use to develop water quality
scas_lgac/lgac_index.htm and can be
Advisory Committee and the Small standards.
obtained by written request to the DFO.
Communities Advisory Subcommittee DATES: Comments must be received on
FOR FURTHER INFORMATION CONTACT:
(SCAS) or before February 21, 2017.
Local Government Advisory Committee
AGENCY: Environmental Protection (LGAC) contact Frances Eargle at (202) ADDRESSES: Submit your comments,
Agency (EPA). 564–3115 or email at eargle.frances@ identified by Docket ID No. EPA–HQ–
epa.gov. OW–2016–0353, to the Federal
ACTION: Notice.
Information Services for Those with eRulemaking Portal: http://
SUMMARY: The Small Communities Disabilities: For information on access www.regulations.gov. Follow the online
Advisory Subcommittee (SCAS) will or services for individuals with instructions for submitting comments.
meet via teleconference on Friday, disabilities, please contact Frances Once submitted, comments cannot be
January 13, 2017, at 11:30 a.m.–12:30 Eargle at (202) 564–3115 or edited or withdrawn. EPA may publish
p.m. (ET). The Subcommittee will eargle.frances@epa.gov. To request any comment received to its public
discuss the LGAC Biannual Report, and accommodation of a disability, please docket. Do not submit electronically any
other environmental and public health request it 10 days prior to the meeting, information you consider to be
issues affecting small communities. This to give EPA as much time as possible to Confidential Business Information (CBI)
is an open meeting and all interested process your request. or other information whose disclosure is
persons are invited to participate. The restricted by statute. Multimedia
Dated: December 16, 2016. submissions (audio, video, etc.) must be
Subcommittee will hear comments from
the public between 11:40 a.m.–11:55 Jack Bowles, accompanied by a written comment.
a.m. on January 13, 2017. Individuals or Director, State and Local Relations, EPA’s The written comment is considered the
organizations wishing to address the Office of Congressional and official comment and should include
Intergovernmental Relations. discussion of all points you wish to
Subcommittee will be allowed a
[FR Doc. 2016–31036 Filed 12–22–16; 8:45 am] make. EPA will generally not consider
maximum of five minutes to present
their point of view. Also, written BILLING CODE 6560–50–P comments or comment contents located
comments should be submitted outside of the primary submission (i.e.,
electronically to eargle.frances@epa.gov. on the web, cloud, or other file sharing
Please contact the Designated Federal ENVIRONMENTAL PROTECTION system). For additional submission
Officer (DFO) at the number listed AGENCY methods, the full EPA public comment
below to schedule a time on the agenda. policy, information about CBI or
Time will be allotted on a first-come [EPA–HQ–OW–2016–0353; FRL 9957–26– multimedia submissions, and general
first-serve basis, and the total period for OW] guidance on making effective
comments may be extended if the comments, please visit http://
mstockstill on DSK3G9T082PROD with NOTICES

Draft Field-Based Methods for www2.epa.gov/dockets/commenting-
number of requests for presentations
Developing Aquatic Life Criteria for epa-dockets.
requires it.
The Local Government Advisory Specific Conductivity FOR FURTHER INFORMATION CONTACT:
Committee (LGAC) will meet via AGENCY: Environmental Protection Colleen Flaherty, Health and Ecological
teleconference on Friday, January 13, Agency (EPA). Criteria Division (Mail Code 4304T),
2017, 12:30 p.m.–1:30 p.m. (ET). The Environmental Protection Agency, 1200
ACTION: Notice of availability.
Committee will discuss Pennsylvania Avenue NW., Washington,

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Document Created: 2016-12-23 12:29:19
Document Modified: 2016-12-23 12:29:19
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice of Inquiry.
Dates		Initial Comments are due February 6, 2017, and Reply Comments are due February 27, 2017.
Contact		Glenna Riley (Legal Information), Office of the General Counsel, 888 First Street NE., Washington, DC 20426, (202) 502-8620, [email protected]
FR Citation		81 FR 94366
81 FR 94366 - Inquiry Regarding the Commission's Policy for Recovery of Income Tax Costs

DEPARTMENT OF ENERGYFederal Energy Regulatory Commission

Federal Register Volume 81, Issue 247 (December 23, 2016)

DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
