FERC last week upheld an administrative law judge’s partialinitial decision denying KN Interstate Gas’s (KNI) request to rollin the costs associated with the construction of its Pony ExpressLine and Kansas City Line.

The Federal Energy Regulatory Commission’s order said it tookthis action because of KNI’s failure to “put forward evidence” inits direct testimony showing the rate impact of the new PonyExpress and Kansas City facilities on the pipeline’s pre-existingcustomers [RP98-117].

FERC set the issue for hearing before an ALJ in February 1998when it learned that the cost overruns associated with Pony Expresswere 41%, increasing the final tab for the project from $159million to $225 million. It also set the rolled-in issue forhearing in Kansas City Line, given that the project wasundersubscribed and KNI was at risk for it.

The 804-mile, 255,000 MMBtu/d Pony Express, which provided themeans for Wyoming producers to ship their gas to Missouri, was putinto service in 1997.

The 34-mile Kansas City Line connected the Pony Express systemto the Kansas City metropolitan area.

Susan Parker

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