With Commissioner Nora M. Brownell shouting “amen and hallelujah,” the Federal Energy Regulatory Commission moved last Wednesday to wrap up a raft of tangled and drawn-out cases that involved the payment of refunds by producers who sold natural gas in the early 1980s at prices that, because they included the Kansas ad valorem tax, were above the maximum legal limit allowed.

In both 1993 and 1997, the Commission directed producers to pay refunds to interstate pipelines for gas sales in the 1980s that exceeded the price ceiling under the Natural Gas Policy Act of 1978, and ordered the pipes to pass through the refunds to their customers. Despite the agency’s collection efforts over the years, it noted that 126 producers still owe refunds for the period from 1983 to 1988, and 32 producers owe for the 1988-1993 period.

Of the $338 million in refunds that FERC estimated were due from producers, the Commission said Wednesday about $104 million in refund obligations still were outstanding. It set $88 million in disputed refund liabilities for hearing; said it planned to cease collection efforts for about $5-6 million due to a variety of reasons — producers can’t be located, companies have dissolved, refunds would bankrupt certain producers, and some parties have died; and said it would offer relief deals to producers who owe $9 million.

While FERC has ended its collection efforts, an agency staff member said private parties still could continue to try to collect unpaid refund liabilities from producers.

With its actions Wednesday, the Commission cleared away a major headache from its docket. “Some complain about how slow the California [electric] refund case [is] going,” said Chairman Pat Wood, suggesting that it paled in comparison to the Kansas refund matter. “I think it’s a good day to get these [cases] out of here.”

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