FERC's investigations into whether four interstate natural gas pipelines set unreasonable rates to recoup costs are moving forward, and an agreement on one of the four cases appears imminent, according to documents filed with the regulatory agency.
Last January, commissioners with the Federal Energy Regulatory Commission voted 4-0 to initiate separate Natural Gas Act Section 5 investigations into four companies -- Tuscarora Gas Transmission Co., Empire Pipeline Inc., Iroquois Gas Transmission System LP and Columbia Gulf Transmission LLC -- to determine "the justness and reasonableness of...currently effective tariff rates," (see Daily GPI, Jan. 21). The Commission appointed four settlement judges, one for each case, on March 23.
FERC records show that on Tuesday, the participants in the Empire investigation [RP16-300] submitted a joint request that a settlement conference scheduled for Wednesday be canceled, adding that "a comprehensive agreement in principle is imminent." Settlement Judge H. Peter Young subsequently agreed to cancel the meeting because both sides demonstrated "good cause," and instead ordered the parties to send him, by noon on Thursday, an informal report confirming an agreement has been reached.
Meanwhile, FERC Secretary Kimberly Bose on Wednesday issued a notice of informal settlement conference in the Iroquois case [RP16-301], stating its participants will convene at the Commission's headquarters in Washington, DC, on June 1. Settlement Judge Steven Glazer reported on May 19 that the sides met previously on April 28 and May 18, adding "in light of the progress that is being made, I recommend that the settlement proceeding continue."
Jennifer Whang, the settlement judge overseeing the Tuscarora investigation [RP16-299], said in a filing Monday that the parties in that case met for an initial settlement conference on May 19.
"After lengthy discussion of the issues, the parties agreed to undertake certain actions that may facilitate a settlement herein," Whang said. "In addition, the parties agreed to meet for a second settlement conference [at FERC headquarters] on June 15. In view of the progress that is being made, I recommend that the settlement proceeding continue."
Progress appeared slowest on the Columbia case [RP16-302]. According to FERC records, Settlement Judge Philip Baten issued his first status report on the matter on May 20. That report said the first settlement conference for the investigation is scheduled for June 2.
FERC did not return a call seeking comment on Thursday.
The investigations follow reviews by FERC staff into the cost and revenue information the companies supplied in several filings -- specifically, Form No. 2, the Annual Report for Major Natural Gas Companies; and Form No. 2-A, Annual Report for Non-Major Natural Gas Companies -- for 2013 and 2014. Using that data, regulators calculated a cost of service for each pipeline and determined what each pipeline's revenues were for those years.
The analysis indicated Columbia had a calculated return on equity (ROE) of 17.3% in 2013 and 18.2% in 2014; Iroquois had ROE of 16.2% in 2013 and 16.3% in 2014; Empire had ROE of 15.8% in 2013 and 20.2% in 2014; and Tuscarora had ROE of 23.6% in 2013 and 24.9% in 2014.