The FERC majority has approved a settlement that not only givescustomers on Texas Gas Transmission lower rates and refunds, butalso clears the way for NorAm Gas Transmission, a non-shipper andpipeline competitor, to have an evidentiary hearing on a number ofrate-related issues contained in the agreement. Commissioner LindaBreathitt dissented in part, saying the ruling set a dangerousprecedent for other rate settlement cases.

Since NorAm is neither a current shipper on the Texas Gas systemnor is it likely to become one in the future, Breathitt said shequestioned “the equity and sense of allowing a non-shipper andcompetitor to interfere with an otherwise uncontested rate-decreasesettlement.” She noted shippers that “agreed to settle the ratecase will be forced to participate in the [NorAm] hearing toprotect their rights,” and will incur additional legal expenses.The bottom line is that the majority ruling “essentially reduces oreliminates the benefits of the settlement to shippers who actuallyuse the Texas Gas system.”

It also could have ramifications beyond the Texas Gas case.”…I am concerned about the adverse effect the majority’s decisionmight have on pipelines and their shippers’ ability to resolve ratecases through settlements.”

The Commission overturned the ruling of an administrative lawjudge (ALJ), who held NorAm wasn’t entitled to a hearing on theso-called “NorAm issues” – such as whether a separateproduction-area rate zone should exist on the Texas Gas system witha separate production-area cost of service. In its decision,however, FERC noted that Texas Gas had agreed in its last rate caseto resolve the “NorAm issues” in its current rate case.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.