FERC should either reject outright or suspend for the maximumfive-month period Dominion Transmission Inc.’s request for a”massive and unsupported rate increase” of $65 million, a municipalgas distributor contends.
Dominion’s requested rate hike, if approved by the Commission,would double the pipeline’s usage charge for firm transportationcapacity, and would increase rates for transportation and storageservices overall by about 27%, according to the city of Richmond,VA.
“Yet, the basis for the proposed rate increase is shrouded inmystery — intentionally,” the municipal distributor told FERC,pointing out that about two-thirds of the requested rate hike ($43million) is attributed to “non-purchased supply.” Dominion “doesnot explain, much less justify, the basis for this obviouslyextraordinary cost component.”
Dominion contends the $43 million is to compensate itself forgas that it has borrowed from its system supply. But the city ofRichmond found this hard to believe, saying the gas could have comefrom a number of non-system sources — 1) partner gas, which isgas owned by companies in storage fields owned jointly withDominion; and/or 2) customer gas, which is gas owned by customersthat have entitlements to use the storage fields.
“Even assuming against logic and absent any support” that allthe non-purchased supply was system gas, the municipal distributorinsists Dominion failed to justify the huge level of non-purchasedsupply, totaling more than 20 MMDth, that was included in its ratefiling.
In the end, Dominion has not made a “prima facie case” fortwo-thirds of its proposed rate increase, said the city ofRichmond. Absent a summary rejection, FERC should suspendDominion’s filing for the maximum five-month period to give thepipeline a chance to “justify its position with detailed support,”and give customers the opportunity to “analyze meaningfully andrespond” to it. Susan Parker
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