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FERC Opens One Natural Gas Pipeline Rate Investigation, Ends 20 Other Proceedings

Following up on a notice of proposed rulemaking (NOPR) it issued in November, FERC on Tuesday opened an investigation to determine if one natural gas transmission and storage company is substantially over-recovering its cost of service, and it closed proceedings involving 20 other companies.

The Federal Energy Regulatory Commission ordered a hearing before its administrative law judges to determine if Southwest Gas Storage Co. practices had resulted in unjust and unreasonable rates under section 5 of the Natural Gas Act [RP19-257].

“The Commission is concerned that the level of earnings for the company may exceed its actual cost of service, including a reasonable rate of return on equity,” FERC said.

The investigation and hearing evolved from a NOPR and associated policy statement issued by FERC last year in an effort to ensure that ratepayers receive the benefit of tax reductions from reform legislation adopted by the Trump administration in December 2017. The NOPR (RM19-5) required public utility transmission providers with transmission rates under an open access transmission tariff, a transmission owner tariff or a rate schedule to revise those rates to account for changes caused by the $1.5 trillion Tax Cuts and Jobs Acts bill.

The policy statement (PL19-2-000) provided accounting and ratemaking guidance for treating accumulated deferred income taxes (ADIT) for all FERC-jurisdictional public utilities, natural gas pipelines and oil pipelines. It also addressed the accounting and ratemaking treatment of ADIT following asset sales or retirements after Dec. 31, 2017.

Also on Tuesday, FERC found that 20 gas companies had complied with the filing requirements of Order No. 849 and terminated their Form 501-G proceedings without further action [RP19-274].

The companies whose proceedings were terminated are American Midstream, Big Sandy Pipeline LLC, Bison Pipeline LLC, Black Hills Shoshone Pipeline LLC, Centra Pipelines Minnesota Inc., Central Kentucky Transmission Co., Chandeleur Pipe Line LLC, Discovery Gas Transmission LLC, Dominion Energy Questar Pipeline, Elba Express Co. LLC, Fayetteville Express Pipeline LLC, Garden Banks Gas Pipeline LLC, Gulf Shore Energy Partners LP, Gulf States Transmission LLC, KPC Pipeline LLC, Lake Charles LNG Co. LLC, MarkWest New Mexico LLLC, PGPipeline LLC, Southern LNG Co. LLC and Western Gas Interstate Co.

 

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