FERC Sets New Oil Pipeline Rate Index for Next Five Years
Published Date: 4/28/2026
Rule
Summary
The Federal Energy Regulatory Commission just set a new price index to guide oil pipeline rate changes for the next five years, starting July 1, 2026. This means oil pipeline companies will see rate ceilings adjusted based on a Producer Price Index minus 0.55%, reflecting updated data and policies. The new rule kicks in June 29, 2026, helping keep pipeline rates fair and predictable for everyone involved.
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Analyzed Economic Effects
3 provisions identified: 0 benefits, 1 costs, 2 mixed.
New Five-Year Oil Pipeline Index
The Commission sets the oil-pipeline index level at Producer Price Index for Finished Goods minus 0.55% (PPI-FG -0.55%) for the five-year period beginning July 1, 2026. The order is effective June 29, 2026 and the index will guide annual adjustments to oil pipeline rate ceilings each July 1 for the 2026–2031 period.
2019 ROE Data Adjusted for ROE Policy Change
For the index calculation, the Commission adjusted pipelines' 2019 reported return-on-equity (ROE) by averaging each pipeline's originally reported 2019 ROE with an 8.30% CAPM ROE to account for the Commission's 2020 ROE Policy Change. The Commission applies corresponding adjustments to pipelines' 2019 income tax allowance, return on rate base, and total cost of service when calculating the index.
Resubmitted 2019 Cost Data Not Used
The Commission declined to use resubmitted 2019 cost data filed by 61 pipelines in April–June 2025 and instead relied on pipelines' originally submitted 2019 cost data for the index calculation. The same ROE-related adjustments described in this order are applied to those originally submitted 2019 data.
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