Viking Gas Transmission has filed an uncontested settlement that would cut its base rates by 2% and end the nearly year-long investigation by FERC into whether the pipeline over-recovered its costs, resulting in unjust and unreasonable rates for its shippers.

The Federal Energy Regulatory Commission initiated an investigation of Viking’s rates after it established that the pipeline’s return on equity (ROE) 21.39% for 2010 and 21.75% for 2011, which is based on Form 2 cost and revenue information, was significantly higher than what FERC typically allows for interstate gas pipelines (see Daily GPI, Nov. 16, 2012).

Under the proposed settlement, Viking agreed to reduce all of its base tariff rates, which were in effect on Nov. 14, 2012, by 2%, and to file changes to its FERC gas tariff within 15 days following the Commission’s issuance of a final order [RP13-185]. The base settlement rates would take effect on Jan. 1, 2014. Viking must maintain the lower base settlement rates until at least Jan. 1, 2015.

“There is nothing in the settlement that would bar Viking from making limited Section 4 filings to recover the costs for fuel, lost and unaccounted for gas, and annual charge adjustments,” Viking said. The settlement also calls for Viking Gas Transmission, which is operated by ONEOK Partners GP LLC, to file an updated cost and revenue study to the Commission on or before Dec. 31, 2018.

Some of the parties to the uncontested settlement include Michigan Consolidated Gas Co., Northern States Power Co. (Wisconsin), Exelon Corp., Canadian Association of Petroleum Producers, Process Gas Consumers Group, BP Canada Energy Marketing Corp., Tenaska Marketing Ventures, and CenterPoint Energy Resources Corp. doing business as CenterPoint Energy Minnesota Gas.