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Rolled-In Rates Rejected for Pony Express
FERC yesterday upheld an administrative law judge’s partialinitial decision denying KN Interstate Gas’ (KNI) request to rollin the costs associated with the construction of its Pony ExpressLine and Kansas City Line.
The Commission said it took this action because of KNI’s failureto “put forward evidence” in its direct testimony showing the rateimpact of the new Pony Express and Kansas City facilities on thepipeline’s pre-existing customers [RP98-117].
FERC set the issue for hearing before an ALJ in February 1998when it learned that the cost overruns associated with Pony Expresswere 41%, increasing the final tab for the project from $159million to $225 million. It also set the rolled-in issue forhearing in Kansas City Line, given that the project wasundersubscribed and KNI was at risk for it.
The 804-mile, 255,000 MMBtu/d Pony Express, which provided themeans for Wyoming producers to ship their gas to Missouri, was putinto service in 1997. The 34-mile Kansas City Line connected thePony Express system to the Kansas City metropolitan area.
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