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Gas Consumer Groups Back Reform of NGA Refund Process

April 13, 2009
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Twenty groups representing large natural gas consumers and small municipal users last week called on Sen. Jeff Bingaman (D-NM) to back legislation that would reform Section 5 of the Natural Gas Act (NGA), making customers eligible for rate refunds from the date that they file a complaint at FERC.

The gas consumer groups said they are seeking parity with their electric customer counterparts. Under the Federal Power Act (FPA), wholesale electric customers are eligible for a rate refund from the date a Section 206 complaint is filed at the Federal Energy Regulatory Commission. The NGA in contrast only allows for prospective relief for gas consumers in Section 5 complaint cases -- after an agency decision is issued, which "more often than not occurs years after a complaint is filed," they said.

"Simply put, the current system is broken -- it favors pipelines over [gas] consumers by allowing pipelines to keep overcharges rather than giving consumers their money back when their rates are shown to be excessive," said the consumer groups in their letter to Bingaman, chairman of the Senate Energy and Natural Resources Committee. Notable members of the group included the American Public Gas Association, American Public Power Association, Process Gas Consumers, Industrial Energy Consumers and The Consumer Federation of America.

They signaled their strong support for legislation (S. 672), sponsored by Sen. Maria Cantwell (D-WA), that would set the effective date for rate refunds as early as when a complaint case is filed under Section 5 of the NGA. The bill was introduced as part of broader energy legislation being considered by the Senate energy panel.

The consumer groups' letter came only a few days after the Interstate Natural Gas Association of America urged the Senate energy committee to oppose the Cantwell legislation (see NGI, April 6).

"Given the time and expense of a complaint proceeding and the pipelines' obvious and strong incentives to delay the proceedings...the absence of a refund-effective date provision in Section 5 of the Natural Gas Act completely undermines its effectiveness," the consumer groups said.

"FERC Chairman [Jon] Wellinghoff, past Chairman [Joseph] Kelliher and all the sitting commissioners...have openly acknowledged this disparity and the need for Congress to pass legislation to address it."

Other groups signing off to the letter were the National Farmers Union, American Forest and Paper Association, American Iron and Steel Institute, American Coalition for Ethanol, Illinois Public Energy Agency, Minnesota Municipal Utilities, Public Energy Authority of Kentucky, Florida Municipal Natural Gas Association, Public Citizen, Renewable Fuels Association, Iowa Association of Municipal Utilities, Illinois Municipal Utilities Association, Kansas Municipal Utilities, Municipal Gas Authority of Georgia and the Louisiana Municipal Gas Authority.

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