On January 16, 2019, FERC initiated rate cases for three natural gas pipeline entities - Bear Creek Storage Company (RP19-51-000), Northern Natural Gas Company (RP19-59-000) and Panhandle Eastern Pipe Line Company, LP (RP19-78-000). FERC’s action stems from Order No. 849 (July 2018) which required each interstate natural gas pipeline to file a one-time report, called FERC Form No. 501-G, that called for a rough estimate of its return on equity before and after the passage of the Tax Cuts & Jobs Act of 2017 and changes to the Commission’s income tax allowance policies for Master Limited Partnerships in response to rulings by the D.C. Circuit. For these three pipeline entities, after review of the respective filings, FERC is concerned that the level of earnings for each company may exceed their actual costs of service, including a reasonable rate of return on equity. The investigations and hearings will determine whether the existing rates are just and reasonable in accordance with section 5 of the Natural Gas Act (NGA). FERC directed each pipeline to file a cost and revenue study for the latest available 12-month period (test period) within 75 days of the issuance of its order. They permitted the natural gas pipeline entities to include a six-month projected analysis of changes to the test period. For more information, click on the following link:
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Dr. Paul Dumais
CEO of Dumais Consulting with expertise in FERC regulatory matters, including transmission formula rates, reactive power and more.