Due to ongoing settlement discussions, FERC Chief Judge Curtis Wagner Monday gave the go-ahead for a two-week suspension of the Section 5 complaint proceeding in which Natural Gas Pipeline Co. of America LLC (NGPL) is accused of overrecovering its cost of service by more than 20% (see Daily GPI, Nov. 20, 2009).
In an order extending the procedural timelines, Wagner said he agreed that “in view of the strong possibility of settlement [between NGPL and customers], and to afford [FERC] staff and the parties time to continue their exploration of the possibility of settlement of this case, a modest extension of the procedural timelines is in order.”
Trial staff of the Federal Energy Regulatory Commission requested the two-week suspension last Wednesday. It was immediately granted by the presiding administrative law judge (ALJ), Bobbie J. McCartney, who submitted it to Wagner for his review.
Based on preliminary studies, FERC in November initiated Section 5 investigations into whether NGPL, Northern Natural Gas and Great Lakes Gas Transmission Ltd. have been overrecovering their cost of service. If so, their rates would no longer be just and reasonable.
In February the pipelines disputed FERC’s charges (see Daily GPI, Feb. 8).
The staff’s preliminary investigation of financial information submitted by the pipelines for 2008 indicates that NGPL may have achieved a return on equity (ROE) of 24.5% based on an overrecovery of $149 million (RP-10-147), while Northern Natural’s estimated ROE was 24.36% (RP10-148) with an overrecovery of $167 million and the Great Lakes ROE was 20.83% with a FERC-estimated overrecovery of $56 million (RP10-149).
In related action, the ALJ in the Northern Natural Gas complaint proceeding Monday rejected FERC trial staff’s request to appeal an order requiring staff to file a “modified privilege log” to support its claim of privilege.
On March 16 ALJ John P. Dring directed trial staff to provide a proper privilege log — working index of documents that have been withheld or which contain redactions — to him and all other participants in the case, as well as an affidavit, after staff asserted privilege following a request for data by Northern Natural. The Commission trial staff responded to Dring’s request for the log on March 26, but the judge said it was inadequate.
As a result, he ordered FERC staff on April 7 to file a “modified privilege log” to support its claim of deliberative process privilege. But instead of complying with Dring’s request, FERC trial staff filed a motion asking for permission to appeal the April 7 order and an April 14 “Order to Show Cause” to the full Commission.
Under FERC rules, “‘[a] participant may not appeal to the Commission any ruling of a presiding officer during a proceeding unless the presiding officer…finds extraordinary circumstances which make prompt Commission review of the contested ruling necessary to prevent detriment to the public interest or irreparable harm to any person.’ I do not find that such extraordinary circumstances exist in the present case,” said Dring in his Monday order.
Last Wednesday Dring ordered FERC trial staff to show cause why it should not be sanctioned for failing to turn over documents in a complaint proceeding involving Northern Natural despite his repeated requests (see Daily GPI, April 16).
Trial staff was directed to show cause as to why it should not be sanctioned for its failure to submit a proper privilege log; its failure to comply with Dring’s April 7 order; taking extrajudicial action by petitioning the chief judge; and a general lack of candor and good faith, Dring said.
Staff has until the close of business on April 29 to reply, and it will also have an opportunity to be heard at oral arguments on May 4.
“If staff is unable to show cause as to why it should not be sanctioned for failing to comply with my orders and for its general conduct, I will request that the chief judge…stay the proceeding until my order is obeyed, and/or recommend to the Commission that staff counsel be removed from the proceeding for contumacious conduct,” Dring said.
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