Sonat’s proposed $82 million rate hike hit a snag last week, asFERC suspended any increase from occurring until March 1 and calledfor a hearing where opposition to the proposal can presentinformation.

The Commission said that Sonat had not produced enoughinformation about certain provisions in the proposal, and that ahearing was needed so that “parties may fully ventilate all thefacts related to the issue.” FERC accepted the tariff for filingand suspended its effectiveness for five months.

The ruling fell on the side of the opposing parties which includedAtlanta Gas Light, Alabama Gas Corp., Dynegy, Shell Energy ServicesCo., and the Gasp Coalition. They petitioned FERC last month tosuspend the rate increase (see Daily GPI, Sept. 17).

In the filing, Southern proposed a cost of service increase of$82 million to $363 million. The company wanted to increase is ratebase by $433 million because of pipeline and compressorreplacements and relocations, a new $29 million computer system andGISB compliance, and $272 million in expansion costs, including$103.5 million for its North Alabama expansion project which went50% over budget.

Southern also proposed an increase in its rate of return to10.81%, predicated on a 13% return on equity, which is onepercentage point higher than Sonat’s existing ROE and slightlyhigher than FERC typically has allowed for other pipes.

FERC ordered that a prehearing conference will take place by theend of the month. An Administrative Law Judge has yet to beassigned to the case.

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