FERC Sets New Oil Pipeline Price Index
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 update affects oil pipeline companies and helps keep their rate ceilings fair by using a Producer Price Index minus 0.55%. The new rule kicks in June 29, 2026, and aims to balance costs and customer fairness without sudden price jumps.
Analyzed Economic Effects
3 provisions identified: 0 benefits, 0 costs, 3 mixed.
New Five-Year Oil Pipeline Price Index
The Federal Energy Regulatory Commission sets the oil pipeline index at Producer Price Index for Finished Goods minus 0.55% (PPI-FG-0.55%) for the five-year period beginning July 1, 2026 and ending June 30, 2031. The Final Order is effective June 29, 2026 and this index will guide annual changes to oil pipeline rate ceilings.
ROE Adjustment to 2019 Cost Data
To calculate the index, the Commission adjusted pipeline 2019 cost reports to account for the Commission's 2020 return-on-equity (ROE) policy change by averaging each pipeline's originally reported 2019 ROE with an 8.30% CAPM ROE and then applying corresponding adjustments to 2019 income tax allowance, return on rate base, and total cost of service. Pipelines that reported an identical ROE for every year 2019–2024 (20 pipelines) keep their reported ROE without adjustment; these adjustments are used only for calculating the index level for July 1, 2026–June 30, 2031.
Resubmitted 2019 Cost Data Not Used
The Commission declined to incorporate resubmitted 2019 cost data that 61 pipelines filed in April–June 2025 and instead relied on pipelines' originally submitted 2019 cost data when calculating the index level that applies beginning July 1, 2026. The Final Order is effective June 29, 2026.
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Key Dates
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