NGI The Weekly Gas Market Report / NGI All News Access

Breathitt Dissents in Texas Gas Settlement Case

July 20, 1998
/ Print
| Share More
/ Text Size+

Breathitt Dissents in Texas Gas Settlement Case

The FERC majority last week approved a settlement that not only gives customers on Texas Gas Transmission lower rates and refunds, but also clears the way for NorAm Gas Transmission, a non-shipper and pipeline competitor, to have an evidentiary hearing on two deferred rate-related issues in the case. Commissioner Linda Breathitt dissented in part, saying the ruling set a dangerous precedent for other rate settlement cases.

Since NorAm is neither a current shipper on the Texas Gas system nor is it likely to become one in the future, Breathitt said she questioned "the equity and sense of allowing a non-shipper and competitor to interfere with an otherwise uncontested rate-decrease settlement." She noted shippers that "agreed to settle the rate case will be forced to participate in the [NorAm] hearing to protect their rights," and subsequently will incur additional legal expenses. The bottom line is that the majority ruling "essentially reduces or eliminates the benefits of the settlement to shippers who actually use the Texas Gas system."

Also, "...I am concerned about the adverse effect the majority's decision might have on pipelines and their shippers' ability to resolve rate cases through settlements" in the future.

The Commission overturned the ruling of an administrative law judge (ALJ), who held NorAm wasn't entitled to an evidentiary hearing on the so-called "NorAm issues" - such as whether a separate production-area rate zone should exist on the Texas Gas system with a separate production-area cost of service. In its decision, however, FERC noted that Texas Gas had agreed in its last rate case to resolve the "NorAm issues" in its current rate case.

Breathitt argued that FERC contradicted a 1987 precedent set by the D.C. Circuit Court of Appeals. That case, she said, held that "a contesting party did not have the right to a hearing as non-shipper but instead had only a future right to a hearing if and when it became a direct ratepayer." She noted the Commission had applied the court's ruling in a Northwest Pipeline case last year.

Susan Parker

©Copyright 1998 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus