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Settlement Talks Continue in Stingray Rate Hike Case

FERC Chief Judge Curtis Wagner Jr. has ordered Stingray Pipeline Co. LLC, which is seeking a large increase in its pipeline transportation rates, to continue settlement talks with its shippers.

"It is in the public interest to continue the settlement judge procedures in order to allow the parties to try to reach a negotiated settlement" rather than assign the case to a presiding judge for hearing, Wagner wrote in an order issued Tuesday. Initial settlement talks were held at the Washington, DC-based law offices of Vinson & Elkins LLP on June 1.

"As a result of this settlement conference, the parties agreed to exchange documents and continue settlement discussion," said Administrative Law Judge Carmen A. Cintron, the settlement judge in the case. Citing scheduling conflicts, the order said the next settlement conference won't be held until Sept. 14.

Stingray has proposed an across-the-board increase in its transportation rates of up to 500% in an attempt to make up for the load lost to locally delivered shale natural gas [RP11-1957]. Stingray operates in the Gulf of Mexico and comes ashore in Louisiana, where it interconnects with several downstream pipelines -- ANR Pipeline, Natural Gas Pipeline Co. of America and Tennessee Gas Pipeline.

Stingray is one of several interstate gas pipelines that are filing Section 4 rate hikes for the first time in several years due to changing flow patterns on their systems brought on by the development of shale gas.

The Process Gas Consumers Group (PGC), which represents industrial gas customers, and other shippers' organizations have been allowed to more easily intervene to fight the rate hikes thanks to a significant ruling that PGC won in late April in the Stingray case (see Daily GPI, June 2; May 18). In the April 29 order, the Federal Energy Regulatory Commission (FERC) approved PGC's request to intervene in the Stingray case without ordering PGC to identify its members with interest, as the pipeline had requested. FERC simultaneously granted a similar motion by the American Forest & Paper Association.

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