FERC on Thursday opened investigations into rates charged by three interstate natural gas companies — ANR Storage Co., Bear Creek Storage Co. LLC and MIGC LLC — to determine whether they are over-recovering their cost of service by charging rates that are unjust and unreasonable.

Investigations stem from Form 2 cost and revenue information provided by the three companies for 2009 and 2010. Federal Energy Regulatory Commission staff analysis of the information indicated that current rates may allow the companies to recover revenue substantially more than their actual cost of service. None of the companies has made a general Section 4 rate filing in the last 18 years, the FERC orders said [RP12-123, RP12-121, RP12-122].

Based on its Form 2 report, FERC staff estimates that ANR Storage, which provides storage to ANR Pipeline and Great Lakes Gas Transmission, had a return on equity (ROE) of 130.38% for 2009 and 153.71% for 2010.

The Form 2 reports reveal that Bear Creek, which provides storage services to its owners Southern Natural Gas and Tennessee Gas Pipeline, had an ROE of 22.43% for 2009 and 29.16% for 2010, according to FERC. Both Southern Natural and Tennessee are subsidiaries of El Paso Corp.

Commission staff estimated that MIGC, a 256-mile pipeline that operates in the Powder River Basin of Wyoming, had an ROE of 47.74% for 2009 and 57.14% for 2010.

The three companies have been directed to file a full cost and revenue study with the Commission in 75 days.

Over the past few years, the Commission has initiated Section 5 investigations of several interstate pipelines for cost-of-service over-recovery, including Tuscarora Gas Transmission, Kinder Morgan Interstate Gas Transmission LLC, Ozark Gas Transmission LLC, Natural Gas Pipeline Co. of America LLC, Northern Natural Gas and Great Lakes Gas Transmission Ltd. Partners (see Daily GPI, Nov. 20, 2009, May 26). Nearly all of the cases have been resolved.

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