The Canadian Association of Petroleum Producers (CAPP) Friday saw its challenge to a rate increase for Northwest Pipeline, which it claimed would result in an excessive rate of return and unduly high rates, refused by the federal Appeals Court for the District of Columbia (00-1498).

The judges dismissed the producers’ appeal to a decision by the Federal Energy Regulatory Commission in two parts. First, the court ruled it could not review the range of proxy companies used to determine Northwest’s return on equity because CAPP, while arguing for an adjustment of the companies in its original case, had failed to challenge the list of companies in its rehearing request to FERC.

CAPP originally had argued that the six companies whose financials were used as a proxy, since Northwest is not a stand-alone company, included ones which also had unregulated ventures which increased their risk and return, in contrast to Northwest, a regulated company with a lower risk. Since the argument was not offered on rehearing the judges determined they could not properly review it.

The court also found “without merit” CAPP’s call for a lower rate of return based on lower risk. It found competition in Northwest’s market from Tuscarora Gas Transmission in Nevada and Pacific Gas Transmission in Washington, Oregon and Northern California. Also, BC Gas has applied to enter Northwest’s region.

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