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Rolled-In Rates Rejected for Pony Express, Kansas City Lines

Rolled-In Rates Rejected for Pony Express, Kansas City Lines

FERC last week upheld an administrative law judge's partial initial decision denying KN Interstate Gas's (KNI) request to roll in the costs associated with the construction of its Pony Express Line and Kansas City Line.

The Federal Energy Regulatory Commission's order said it took this action because of KNI's failure to "put forward evidence" in its direct testimony showing the rate impact of the new Pony Express and Kansas City facilities on the pipeline's pre-existing customers [RP98-117].

FERC set the issue for hearing before an ALJ in February 1998 when it learned that the cost overruns associated with Pony Express were 41%, increasing the final tab for the project from $159 million to $225 million. It also set the rolled-in issue for hearing in Kansas City Line, given that the project was undersubscribed and KNI was at risk for it.

The 804-mile, 255,000 MMBtu/d Pony Express, which provided the means for Wyoming producers to ship their gas to Missouri, was put into service in 1997.

The 34-mile Kansas City Line connected the Pony Express system to the Kansas City metropolitan area.

Susan Parker

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