Investigations and hearings have been ordered by FERC into three interstate natural gas pipeline companies to determine if they overcharged customers in recovering costs of service. Nine similar proceedings were terminated without any further action.
The Federal Energy Regulatory Commission said it would investigate Bear Creek Storage Co., Northern Natural Gas Co. and Panhandle Eastern Pipe Line Co. LP after a review of reports and other filings.
"FERC is concerned that the level of earnings for each company may exceed their actual costs of service, including a reasonable rate of return on equity," the Commission said.
The investigations stem from a final rule unanimously approved last July. Order 849 required interstate gas pipelines to file a one-time report, Form 501-G, to provide a rough estimate of the return on equity (ROE) before and after passage of the Tax Cuts and Jobs Act of 2017. Form 501-G also reflects changes to FERC's income tax allowance policies following the U.S. Court of Appeals for the District of Columbia Circuit's ruling in the United Airlines v. FERC case.
FERC said the investigations and hearings would determine whether the existing rates are just and reasonable according to Section 5 of the Natural Gas Act. Commission administrative law judges are to hold hearings to determine the just and reasonable ROE for each company. FERC also ordered the three companies to submit a cost and revenue study for the latest available 12-month period within 75 days after the order was issued.
Meanwhile, 501-G proceedings were terminated against ETC Tiger Pipeline, Gulfstream Natural Gas System LLC, Horizon Pipeline Co. LLC, MIGC Inc.; Millennium Pipeline Co. LLC, North Baja Pipeline LLC, Portland Natural Gas Transmission System, Vector Pipeline LP and White River Hub LLC.
Commissioners at the regular meeting on Thursday said the FERC meeting room at the Washington, DC headquarters will be named in honor of former Chairman Kevin McIntyre, who passed away on Jan. 2.
Four natural gas-related items were omitted from the agenda of Thursday's meeting, which analysts and industry officials attribute to a current 2-2 deadlock on the Commission.