FERC Chairman Jon Wellinghoff, acting as Motions Commissioner, Tuesday overrturned and stayed decisions by an administrative law judge (ALJ) in a Section 5 complaint proceeding involving Northern Natural Gas Co.
Wellinghoff’s action stems in part from ALJ John P. Dring’s April 7 order in which the judge directed the Federal Energy Regulatory Commission (FERC) trial staff to file a “modified privilege log” to support its assertion of privilege following a request for data by Northern Natural, which is accused of overrecovering its cost of service. The judge requested the modified log after he expressed dissatisfaction with trial staff’s filed proper privilege log — a working index of documents that have been withheld or which contain redactions.
But instead of complying with Dring’s request, FERC trial staff filed a motion asking for permission to appeal Dring’s April 7 order and an April 14 “Order to Show Cause” to the full Commission. Dring denied staff’s request, saying such an appeal was called for only when there are “extraordinary circumstances which make prompt Commission review of the contested ruling necessary to prevent detriment to the public interest or irreparable harm to any person.”
But Wellinghoff overrode Dring’s ruling, saying, “Commission trial staff demonstrated extraordinary circumstances in accordance with…the Commission’s regulations that make prompt Commission review of the contested rulings necessary.” He referred trial staff’s interlocutory appeal to the full Commission.
Wellinghoff also stayed Dring’s order requiring trial staff to show cause as to why it should not be sanctioned for its failure to submit a modified privilege log; its failure to comply with Dring’s April 7 order; and a general lack of candor and good faith. In seeking the show-cause order, Dring had accused trial staff of engaging in “contumacious [stubbornly disobedient] conduct” and delaying the proceeding.
Trial staff said complying with the show-cause order would require it to disclose the names of persons who were involved in the investigation that led to the charges against Northern Natural Gas.
The ALJ proceeding stems from a November order in which FERC initial formal Section 5 investigations of three pipelines — Northern Natural Gas, Natural Gas Pipeline Co. of America LLC (NGPL) and Great Lakes Gas Transmission Ltd. — based on preliminary studies that indicate the three may be overrecovering their cost of service by more than 20% (see Daily GPI, Nov. 20, 2009). If so, their rates would no longer be just and reasonable.
In February the pipelines disputed FERC’s charges (see Daily GPI, Feb. 8).
The staff’s preliminary investigation of financial information submitted by the pipelines for 2008 indicates that NGPL may have achieved a return on equity (ROE) of 24.5% based on an overrecovery of $149 million [RP-10-147], while Northern Natural’s estimated ROE was 24.36% [RP10-148] with an overrecovery of $167 million and Great Lakes ROE was 20.83% with a FERC-estimated overrecovery of $56 million [RP10-149].
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