Oil Pipelines Deflate: FERC's -1.42% Rate Riddle
Published Date: 11/24/2025
Proposed Rule
Summary
The Federal Energy Regulatory Commission wants to update the yearly rate limits for oil pipelines starting July 1, 2026, using a new index that’s the Producer Price Index for Finished Goods minus 1.42%. This affects oil pipeline companies and could change how much they can charge for transportation. People have until December 24, 2025, to share their thoughts on this plan before final decisions are made.
Analyzed Economic Effects
4 provisions identified: 1 benefits, 0 costs, 3 mixed.
Index set to PPI‑FG minus 1.42%
The Commission proposes to use the Producer Price Index for Finished Goods (PPI‑FG) minus 1.42% as the index level to set annual oil pipeline rate ceilings for the five-year period commencing July 1, 2026. This proposal would be used when pipelines adjust rate ceilings each July 1 and therefore directly affects oil pipeline companies and shippers.
Revenue effects versus two baselines
The Commission's Regulatory Impact Analysis says adopting the proposed index would reduce interstate oil pipeline transportation revenues over 2026–2031 compared to keeping the 2021–2025 index level (Baseline 1), but would increase revenues over 2026–2031 compared to having no effective index (Baseline 2). The RIA notes these are the primary measurable effects and that broader effects on commodity prices or consumers are considered minimal or attenuated.
Middle 80% trimming and exclusion of late resubmissions
For the five-year review the Commission proposes trimming the data set to the middle 80% of pipelines and to calculate the index using pipelines' originally submitted FERC Form No. 6, page 700 data for 2019. The Commission notes that 61 pipelines resubmitted page 700 data for 2019 since April 2025 and states it did not include those late resubmissions in the proposed index calculation.
Small pipelines: 43 entities identified
Using the SBA definition (fewer than 1,500 employees), the Commission identified 43 small oil pipeline entities that the proposed rule will affect. The Commission certified that the proposed rule will not have a significant economic impact on a substantial number of small entities and states that the hourly burden for submitting a tariff filing remains 7 hours ($721).
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Key Dates
Department and Agencies
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