Rolled-In Rates Rejected for Pony Express, Kansas City Lines
FERC last week upheld an administrative law judge's partial
initial decision denying KN Interstate Gas's (KNI) request to roll
in the costs associated with the construction of its Pony Express
Line and Kansas City Line.
The Federal Energy Regulatory Commission's order said it took
this action because of KNI's failure to "put forward evidence" in
its direct testimony showing the rate impact of the new Pony
Express and Kansas City facilities on the pipeline's pre-existing
FERC set the issue for hearing before an ALJ in February 1998
when it learned that the cost overruns associated with Pony Express
were 41%, increasing the final tab for the project from $159
million to $225 million. It also set the rolled-in issue for
hearing in Kansas City Line, given that the project was
undersubscribed and KNI was at risk for it.
The 804-mile, 255,000 MMBtu/d Pony Express, which provided the
means for Wyoming producers to ship their gas to Missouri, was put
into service in 1997.
The 34-mile Kansas City Line connected the Pony Express system
to the Kansas City metropolitan area.
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