FERC RULE REFORMS RATEMAKING FOR OIL PIPELINES

As required by the 1992 Energy Policy Act, the Federal Energy Regulatory Commission has issued a rule reforming ratemaking for U.S. oil pipelines. FERC's rule applies an industry-wide cap on annual rate changes, using as an index the producer price index for finished goods minus 1%. The rule allows rates to be charged up to the ceiling level and places no limit on the number of times a rate may be changed so long as the ceiling is not violated.

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