In a major clarification of policy, FERC decided it wasn’tnecessary to address the merits of each objection before approvingcontested pipeline rate settlements. Instead, it said settlementscould be ratified based on the reasonableness of the overallpackage. The policy adjustment was reflected in a rehearing orderthat approved a rate settlement between Trailblazer Pipeline andits customers as being “reasonable as a package” for consentingparties, yet at the same time severed contesting parties, AmocoProduction and Amoco Energy. The action cleared the way forconsenting parties to maintain the benefits of their settlementbargain 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 withregard to several important issues involving settlements. [It]clarifies that the Commission does not have to make a determinationon all the issues contested in a rate case in order to approve theoverall settlement. Rather, the Commission is making a meritsdetermination in approving Trailblazer’s settlement as just andreasonable as a whole,” Commissioner Linda Breathitt said.

In short, the Commission found that the “overall benefits” ofthe Trailblazer settlement outweigh the alternative of”litigationfor all parties,” she said. “This…approach is one that makessense to me and [is] one that I support.” INGAA praised FERC forits decision, noting that a ruling to the contrary would have beena deterrent to pipeline-customer settlements.

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