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FERC Approvals Close Out Empire, Iroquois Pipeline Rate Cases

FERC approved two separate uncontested settlements Thursday, bringing an end to investigations begun early this year into whether a pair of interstate natural gas pipelines set unreasonable rates to recoup costs.

In January, commissioners voted 4-0 to initiate separate Natural Gas Act Section 5 investigations into four companies -- Tuscarora Gas Transmission Co. [RP16-299 and RP16-1137], Empire Pipeline Inc. [RP16-300], Iroquois Gas Transmission System LP [RP16-301] and Columbia Gulf Transmission LLC [RP15-302] -- 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.

Without comment as part of its consent agenda, the Federal Energy Regulatory Commission on Thursday approved an uncontested settlement filed by Iroquois on Aug. 18 and conditionally approved another filed by Empire.

The Iroquois settlement resolves "all issues in the Natural Gas Act Section 5 case brought by the Commission," FERC said. Approval of the Empire rate settlement came subject to the company filing a revised settlement agreement modifying the standard of review provision, which "is inconsistent with Commission policy as it appears to impose the public interest standard of review on future changes to the settlement by non-settling third parties," FERC said.

Last month, FERC approved uncontested settlements filed by Tuscarora and by Columbia (see Daily GPI, Sept. 22).

The quartet of investigations followed 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.

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