FERC has initiated investigations under Section 5 of the Natural Gas Act to determine whether the rates of two pipelines -- Dominion Energy Overthrust Pipeline LLC and Midwestern Gas Transmission Co. -- are just and reasonable.
According to orders approved by the Federal Energy Regulatory Commission Thursday, the two companies "may be substantially over-recovering [their] cost of service," causing their existing rates to be unjust and unreasonable” [RP18-442; RP18-441].
A review of Midwestern's Form 2 filings concluded that the company's return on equity (ROE) was 15.8% in 2015 and 16.6% in 2016, FERC said. A similar review of Overthrust's Form 2 filings indicated ROE of 23.4% in 2015 and 19.9% in 2016.
Midwestern, owned by Oneok Inc., is a 400-mile pipeline that provides bi-directional natural gas service to markets in Tennessee, Kentucky, Indiana, southern Illinois and the Chicago market hub. It connects to more than a dozen other major interstate pipeline systems, including Rockies Express Pipeline, Texas Eastern Transmission, ANR Pipeline Co., Columbia Gulf Transmission, Tennessee Gas Pipeline Co. and Texas Gas Transmission.
Overthrust is a 261-mile pipeline in southwestern Wyoming that is owned and operated by Dominion Energy Questar Pipeline. It provides transportation services for producers in the Green River, Overthrust, Wamsutter and other Rockies-producing basins through interconnects to pipelines including Ruby Pipeline, Rockies Express Pipeline, Dominion Energy Questar Pipeline, Kern River Gas Transmission Co. and Wyoming Interstate Co.
FERC ordered the companies to file full cost and revenue studies within 75 days and directed an administrative law judge to issue an initial decision in each case within 47 weeks.