Trailblazer Settlement Triggers Policy Changes
In a major clarification of policy, FERC decided it wasn't
necessary to address the merits of each objection before approving
contested pipeline rate settlements. Instead, it said settlements
could be ratified based on the reasonableness of the overall
package. The policy adjustment was reflected in a rehearing order
that approved a rate settlement between Trailblazer Pipeline and
its customers as being "reasonable as a package" for consenting
parties, yet at the same time severed contesting parties, Amoco
Production and Amoco Energy. The action cleared the way for
consenting parties to maintain the benefits of their settlement
bargain while giving the Amoco affiliates a chance to litigate the
"complex factual issues" that they raised [RP97-408-006].
"...I believe that [this] order reflects a change in policy with
regard to several important issues involving settlements. [It]
clarifies that the Commission does not have to make a determination
on all the issues contested in a rate case in order to approve the
overall settlement. Rather, the Commission is making a merits
determination in approving Trailblazer's settlement as just and
reasonable as a whole," Commissioner Linda Breathitt said.
In short, the Commission found that the "overall benefits" of
the Trailblazer settlement outweigh the alternative of "litigation
for all parties," she said. "This...approach is one that makes
sense to me and [is] one that I support." INGAA praised FERC for
its decision, noting that a ruling to the contrary would have been
a deterrent to pipeline-customer settlements.
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