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Argued January 15, 2002

On Petition for Review of an Order of the Federal Energy Regulatory Commission

Williams, Senior Circuit Judge: In December 2000 the Federal Energy Regulatory Commission established a formula for changes in the ensuing years’ price caps for interstate oil pipelines. See Order Concluding Initial Five-Year Review of the Oil Pipeline Pricing Index, 93 FERC p 61,266 (2000) (“Order” or “2000 Order”). To drive the annual change in the caps, it chose the Producer Price Index for Finished Goods minus one percent (“PPI-1″). Petitioner Association of Oil Pipe Lines challenges this as arbitrary and capricious, saying that the FERC Staff report justifying continuing adherence to the PPI-1 index used statistical methods that deviated from FERC’s previous methodology without apparent justification, and that it also failed to account for special factors potentially altering the pattern of future changes. We find FERC’s responses to the Association’s criticisms inadequate–except as to the special factors–and therefore remand for further proceedings.

 
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