NPGA Analyzes FERC’s Release of a New 5 Year Index

Editor’s Note: The following update on the 5 Year Index Order appeared in the National Propane Gas Association’s (NPGA) The Bobtail news section.

Washington, D.C. (April 30, 2026) — On Friday, April 24, the Federal Energy Regulatory Commission (FERC) released its 5 Year Index Order, providing index levels for the five years beginning July 1, 2026. The 5 Year Index caps the increase in rates oil pipelines (and pipelines serving propane) may charge on an annual basis, unless a pipeline engages in market-based rates, cost-based ratemaking or settlement rates (all of which are rare in propane pipelines). FERC adopted an index level of the Producer Price Index for Finished Goods (PPI-FG) – 0.55%. This is less than the prior 5 Year Index, which was PPI-FG +0.78%. Shippers on the pipeline prefer a lower index, as it will cap the annual increase in tariffs.

NPGA had advocated for an index of PPI-FG – 1.63%, while the most aggressive pipeline interest had advocated for PPI-FG + 0.83%. The PPI-FG – 0.55% index for the upcoming five years will save the propane industry $7 billion versus the prior 5 Year Index level and approximately $14 billion compared to the aggressive position posited by the pipelines.

NPGA is reviewing the order and will take appropriate action as necessary. The Supply and Logistics Committee will discuss the order and its implications in detail during its Zoom call on May 21. Further, NPGA will host the chairman of the Federal Energy Regulatory Commission at NPGA Propane Days on June 8.