Reference: 3rd Rev 1st Rev Sheet No. 21 to FERC Gas Tariff, Second Revised Volume No. 1. The Commission grants waiver of the notice requirements and accepts the tariff sheet referenced above, reflecting an out-of-cycle PGA filing, effective December 5, 1990, subject to refund.1 Since previously filed rates of Granite State Gas Transmission, Inc. (Granite State) in Docket Nos. RP91-2-000 and RP91-12-000 are in effect, subject to refund, Granite State's request for waiver of section 154.66 of the Commission's regulations to make rate changes to suspended rates in those dockets is unnecessary. The filing reflects a $.1400 per Dth increase in the Demand 1 component of Granite State's demand rate, a $.0028 per Dth decrease in the Demand 2 component of the demand rate, and a $.1117 increase in the gas charge, as compared to the rate levels reflected in Docket No. TQ91-4-4-000, effective November 27, 1990. Notices of intervention and unopposed timely filed motions to intervene are granted pursuant to the operation of Rule 214 of the Commission's Rules of Practice and Procedure (18 C.F.R. section 385.214). Any opposed or untimely filed motion to intervene is governed by the provisions of Rule 214. This acceptance for filing shall not be construed as a waiver of the requirements of section 7 of the Natural Gas Act, as amended, nor shall it be construed as constituting approval of the referenced filing or of any rate, charge, classification, or any rule, regulation, or practice affecting such rate or service contained in your tariff; nor shall such acceptance be deemed as recognition of any claimed contractual right or obligation associated therewith; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against your company. [¶ 61,009] Bayou Interstate Pipeline System, Docket No. TQ91-2-61-000 (Issued January 7, 1991) By Direction of the Commission: Lois D. Cashell, Secretary. Reference: Twenty-First Revised Sheet No. 4' to FERC Gas Tariff, Original Volume No. 1. The Commission grants waiver of its notice requirements and accepts the tariff sheet referenced above, reflecting an out-of-cycle purchased gas adjustment filing by Bayou Interstate Pipeline System (Bayou), effective December 12, 1990, subject to refund.1 Bayou did not report its Account No. 191 deferral balances on its Schedule G-2 correctly. Since this error has no rate impact on the instant filing, Bayou is directed to comply with Specific Instruction No. 12 of FERC Form No. 542-PGA (Revised) in reporting its Account No. 191 deferral balances on its Schedule G-2 in future PGA filings. In addition, Bayou is reminded it is obligated to file its tariff sheets electronically for any filings submitted after December 31, 1990. The Commission's acceptance of the filing is premised upon the company's representation that the instant filing is based upon known and measurable changes in its gas costs. 1 All Costs collected by a quarterly or out-of-cycle PGA filing are subject to refund and review in the succeeding annual PGA. (Order No. 483, FERC Statutes and Regulations ¶ 30,778, at p. 30,875.) Notices of intervention and unopposed timely filed motions to intervene are granted pursuant to the operation of Rule 214 of the Commission's Rules of Practice and Procedure (18 C.F.R. section 385.214). Any opposed or untimely filed motion to intervene is governed by the provisions of Rule 214. This acceptance for filing shall not be construed as a waiver of the requirements of section 7 of the Natural Gas Act, as amended; nor shall it be construed as constituting approval of the referenced filing or of any rate, charge, classification, or any rule, regulation, or practice affecting such rate or service contained in your tariff; nor shall such acceptance be deemed as recognition of any claimed contractual right or obligation associated therewith; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against your company. 1 All costs collected by a quarterly or out-of-cycle PGA filing are subject to refund and review in the succeeding annual PGA. (Order No. 483, FERC Statutes and Regulations ¶ 30,778, at p. 30,875.) [¶ 61,010] Mississippi River Transmission Corporation, Docket No. RP91-46-000 Order Accepting and Suspending Certain Tariff Sheets Subject to Refund and Conditions, Rejecting Certain Tariff Sheets, and Establishing Conference (Issued January 9, 1991) Before Commissioners: Martin L. Allday, Chairman; Charles A. Trabandt, On December 10, 1990, Mississippi River Transmission Corporation (MRT) filed tariff sheets pursuant to Order No. 5281 to revise its allocation of the fixed take-or-pay charges billed to it by its upstream pipeline supplier, Natural Gas Pipeline Company of America (Natural). MRT has filed both primary tariff sheets2 and alternate tariff sheets3 representing two different allocation methods. MRT seeks waiver of the notice requirements of section 4 of the Natural Gas Act to permit an effective date of the earlier of December 9, 1990, or the date that Natural's Order No. 528 filings in Docket Nos. RP91-22-000 and RP91-31-000, which MRT is tracking, are permitted to become effective. For the reasons discussed below, the Commission accepts and suspends MRT's primary tariff sheets, effective January 10, 1991, subject to refund and conditions, and establishes a conference at which parties should be prepared to discuss settlement. The alternate tariff sheets are rejected. Background The purchase deficiency allocation method used by MRT in all of its Order No. 500 [FERC Statutes and Regulations ¶ 30,761] filings has been found by the United States Court of Appeals for the District of Columbia to violate the filed rate doctrine. Associated Gas Distributors v. FERC (AGD II), 893 F.2d 349 (D.C. Cir. 1989). On October 9, 1990, the Supreme Court of the United States denied the request for certiorari of the AGD II decision filed by the U.S. Solicitor General on behalf of the Commission, and the court of appeals' mandate issued on October 17, 1990.. On November 1, 1990, the Commission issued Order No. 528, in which it addressed the 153 FERC 61,163 (1990). 2 Eleventh Revised Sheet No. 4A.1, Eighth Revised Sheet No. 4A.4, Seventh Revised Sheet No. 4A.5, Sixteenth Revised Sheet No. 75, Fourteenth Revised Sheet No. 76, Seventh Revised Sheet No. 77, and Sixteenth Revised Sheet No. 78 to FERC Gas Tariff, Second Revised Volume No. 1. 3 Alt. Eleventh Rev. Sheet No. 4A.1, Alt. Eighth Revised Sheet No. 4A.4, Alt. Seventh Revised Sheet No. 4A.5, Alt. Sixteenth Revised Sheet No. 75, Alt. issue of the collection by interstate pipelines o the take-or-pay costs included in their fixe charges in light of the court's decision. Amon other things, the Commission stayed th authority of all pipelines (except those specif cally excluded) to collect fixed charges based o the purchase deficiency allocation metho effective 30 days after publication of Order N 528 in the Federal Register. In addition, th Commission permitted pipelines subject Order No. 528 to file new tariff provisions replace the stayed provisions, and the Commi sion adopted certain principles under whi those proposals will be evaluated. The costs billed to MRT by Natural inclu take-or-pay settlement costs paid to produce as well as costs billed to Natural by Colora Interstate Gas Company (CIG) and Northwe Pipeline Corporation (Northwest). Natural h made two filings pursuant to Order No. 5 concerning those costs. On November 9, 199 in Docket No. RP91-22-000, Natural fil tariff provisions to include general tariff la guage concerning Natural's recovery of its s tlement costs paid to producers and flowthrough of fixed charges billed upstream pipelines. The amount allocated MRT was $430,205. In that filing, howev Natural only set out an actual allocation of settlement costs paid to producers and did r set out an actual allocation of fixed char billed by upstream pipelines. Thereafter, November 20, 1990, in Docket N RP91-31-000, Natural filed tariff sheets reflect the flowthrough to its customers of fixed charges billed to it by its upstream suppliers. Natural's filing allocated to MI $10,870 in take-or-pay costs assessed to Na ral by CIG and $23,459 in take-or-pay co Fourteenth Rev. Sheet No. 76, Alt. Seventh Revi 4 Order No. 528 was published in the Fed Register on November 16, 1990. 55 Fed. Reg. 47, (1990). Accordingly, the stay became effective December 16, 1990, 30 days after the date of publ tion. assessed to Natural by Northwest. On December 7, 1990, the Commission accepted Natural's filing in Docket No. RP91-22-000 effective December 10, 1990.5 On December 20, 1990, the Commission accepted Natural's filing in Docket No. RP91-31-000 effective December 21, 1990. On December 10, 1990, MRT made the instant filing in accordance with the principles of Order No. 528 to reflect a new allocation of the revised amounts Natural proposes to bill MRT in its Order No. 528 filings. Details of MRT's Proposal MRT proposes primary and alternate tariff sheets to recover 100 percent of the take-or-pay costs allocated to it by Natural in Docket Nos. RP91-22-000 and RP91-31-000. In both proposals, MRT would allocate the costs solely to its firm sales customers under Rate Schedules CD-1 and SGS-1. Primary tariff sheets. In its primary tariff sheets, MRT proposes to allocate the jurisdictional portion of the costs billed by Natural to its firm sales customers under Rate Schedules CD-1 and SGS-1 on the basis of those customers' contract demands on June 1, 1988, the effective date of MRT's first filing to flowthrough take-or-pay costs billed to it by Natural. For each jurisdictional customer, MRT has developed a ratio of each individual customer's contract demand effective June 1, 1988, to the total of all CD-1 and SGS-1 contract demands effective June 1, 1988. MRT then subtracts from the resulting revised charge for each customer the amounts collected to date from that customer under the purchase deficiency methodology. MRT proposes to amortize the net amounts over the same periods used by Natural in its billings to MRT. MRT had originally proposed this contract demand allocation method as an alternative to the purchase deficiency method in its initial take-or-pay filing under Order No. 500, filed May 2, 1988, in Docket Nos. RP88-146-000 and TA88-3-25-000 to recover Natural's takeor-pay costs. However, the Commission rejected this proposal as inconsistent with the requirement that downstream pipelines allocate the costs on an as-billed basis. MRT asserts that this method assigns costs to the customers who benefitted most substantially from its least-cost purchasing strategy, i.e., its jurisdictional sales customers. MRT avers that this allocation methodology is the best suited to its system and requests that the primary tariff sheets be accepted. Alternate tariff sheets. MRT has submitted an alternate proposal in order to avoid an 553 FERC 61,349 (1990). interruption in the collection of costs from its customers should the Commission reject the primary proposal. Under the alternate method, MRT would also allocate all the costs to its firm sales customers, but based upon current measures of system utilization during the test period of MRT's current rate case proceeding in Docket No. RP89-248-000 (the 12 months ended February 28, 1990), rather than based on June 1, 1988 contract demand. The composite method is based on the average of the results of the following methodologies: (1) contract demands as of February 28, 1990; (2) D-2 billing determinants in effect as of February 28, 1990; and (3) actual throughput to traditional markets for the twelve months ended February 28, 1990. Each customer's revised take-or-pay charge would then be calculated and amortized in the same manner as in the proposed primary allocation method. Public Notice, Interventions, and Protests Public notice of the instant filing was issued providing for protests, motions, or notices to intervene to be filed on or before December 21, 1990. Timely notices or motions to intervene were filed by the parties indicated in the Appendix to this order. Pursuant to Rule 214 (18 C.F.R. § 385.214 (1990), any timely filed motions to intervene are granted unless an answer in opposition is filed within 15 days of the date such motion is filed. Any timely filed motions not listed in the Appendix are also granted in accordance with the conditions of Rule 214. Also, motions to intervene out-oftime were filed by the persons indicated in the Appendix. Pursuant to 18 C.F.R. § 385.214 (d), the Commission finds that at this early stage of the proceeding, the late interventions will not disrupt this proceeding or place additional burdens on existing parties. Accordingly, the late filed motions to intervene are granted. As further indicated in the Appendix, a number of the intervenors included protests in their filings, outlining numerous objections to MRT's proposed methodology. The major issues raised include (1) whether MRT's filing violates the filed rate doctrine; (2) whether the filing is consistent with the equitable sharing policy set forth in Order Nos. 500 and 528; (3) whether MRT's allocation of costs to firm sales customers only violates Order No. 528's requirement that the costs be spread as broadly as possible; (4) whether MRT's proposal improperly denies its customers refunds of amounts previously collected under Order No. 500; and (5) whether MRT's proposal places an unfair burden on its small captive customers. Discussion Both MRT's primary and alternate proposals generally conform to the guidelines of Order No. 528. Therefore, the Commission will allow MRT to place into effect the tariff sheets underlying its primary filing. The Commission also directs staff to convene a conference at which parties should be prepared to discuss settlement. In Order No. 528, the Commission sought to encourage pipelines and their customers to reach settlements concerning revised methods for allocating the take-or-pay settlement costs included in their fixed charges. Furthermore, the Commission stated that in order to accommodate settlement discussions, it might, among other things, convene conferences to discuss settlement. Accordingly, consistent with Order No. 528, the Commission directs that staff convene a conference at which all issues raised by the protestors may be discussed. All parties should come prepared to discuss settlement, and the parties should be represented by principals who have the authority to commit to a settlement. Staff is directed to report the results of the conference within 120 days of the issuance of this order. Thereafter, the Commission will take such further action as is appropriate. In view of the conference to discuss settlement, the Commission will not address the individual issues raised by the parties at this time. MRT requests waiver of the 30-day notice provision of NGA section 4 to permit a December 9, 1990 effective date, in order to coincide with the effective date proposed in Natural's first Order No. 528 filing. The Commission denies MRT's request. The Commission stated in Order No. 528 that it did not intend to waive the 30-day notice requirement for filings pursuant to that order. Accordingly, the Commission accepts MRT's primary tariff sheets to be effective January 10, 1991, 30 days after filing. MRT's Motion for Clarification in Docket No. RM91-2-002 et al. On December 28, 1990, MRT filed a motion requesting that it be added to the pipelines listed in Appendix A to Order No. 528, therefore exempting MRT from the stay of certain pipelines' authority to allocate take-or-pay costs based on the purchase deficiency methodology. The pipelines listed in Appendix A either have final and nonappealable settlements in place specifying the manner of take-or-pay recovery, or are recovering take-or-pay costs under Commission orders that have become final and nonappealable. In its motion, MRT asserts that the Commission's orders in all of its take-or-pay flowthrough filings both - those involving the Natural costs at issue here and those involving costs billed by other upstream pipelines are final and nonappealable with regard to the filed rate. Therefore, the motion asks that MRT be included in Appendix A to Order No. 528 and be permitted to continue collecting take-or-pay costs under its existing passthrough mechanism. MRT also reserves the right to withdraw the instant filing to revise the allocation of costs billed it by Natural, if its motion is granted. The Commission will consider MRT's motion after reviewing the responses due to be filed on January 14, 1991. The Commission's acceptance of MRT's primary tariff sheets herein is subject to the Commission's determination on MRT's motion. Suspension Based upon a review of the filing, the Com mission finds that the proposed primary tarif sheets have not been shown to be just and reasonable, and may be unjust, unreasonable unduly discriminatory, or otherwise unlawfu Accordingly, the Commission shall accept th primary tariff sheets for filing and suspen their effectiveness for the period set fort below, subject to the conditions set forth in th order. The Commission's policy regarding rate su pensions is that rate filings generally should t suspended for the maximum period permitte by statute where preliminary study leads th Commission to believe that the filing may b unjust, unreasonable, or that it may be inco sistent with other statutory standards. S Great Lakes Gas Transmission Co., 12 FER 61,293 (1980) (five-month suspension). It recognized, however, that shorter suspensio may be warranted in circumstances where su pension for the maximum period may lead harsh and inequitable results. See Valley C Transmission, Inc., 12 FERC ¶ 61,197 (198 (one-day suspension). Such circumstances ex here, where the pipeline is filing because changed circumstances resulting from a co remand, as recognized by the Commission Order No. 528. Accordingly, in this case, Commission will exercise its discretion to s pend the rates for a shorter period and peri the rates to take effect on January 10, 19 subject to refund and subject to the conditi set forth in the body of this order and in Ordering Paragraphs below. The Commission orders: (A) MRT's primary tariff sheets listed footnote no. 2 to this order are accepted suspended, effective January 10, 1991, sub to refund and subject to the conference to convened in this proceeding. (B) MRT's request for waiver of the 30-day notice requirement of section 4 of the Natural Gas Act is denied. (C) MRT's alternate tariff sheets listed in footnote no. 3 to this order are rejected. (D) The Commission staff is directed to convene a conference to address the concerns raised by the protestors. All parties should be represented at the conference by principals who can commit to a settlement of the issues presented by this filing. Staff shall report the results of the conference to the Commission within 120 days after issuance of this order. (E) MRT is directed to track any changes in the take-or-pay costs allocated to MRT by Natural in Docket Nos. RP91-22-000 and RP91-31-000. Commissioner Trabandt concurred. Appendix Illinois Power Company Laclede Gas Company Process Gas Consumers Group * Public Service Commission of the State of Mis- Small General Service Municipal Group * Union Electric Company ** *Also protests the filing. [¶ 61,011] Arkla Energy Resources, a Division of Arkla, Inc., Docket No. RP91-49-000 Order Accepting and Suspending Tariff Sheets Subject to Refund and Conditions, Rejecting Tariff Sheets, and Establishing a Conference : (Issued January 10, 1991) Before Commissioners: Martin L. Allday, Chairman; Charles A. Trabandt, On December 11, 1990, Arkla Energy Resources (Arkla) filed primary1 and alternate2 tariff sheets proposing two methods of recovering approximately $61.6 million in jurisdictional take-or-pay settlement costs, effective January 1, 1991. Under the primary tariff sheets, Arkla would include 100 percent of the costs in a volumetric surcharge. Under the alternate sheets, it proposes to include 75 percent of the costs in a volumetric surcharge and absorb the remainder. The Commission rejects the primary tariff sheets, but accepts and suspends, effective January 11, 1991, the alternate tariff sheets, subject to refund and conditions, and establishes a conference. Background Arkla seeks in this filing to recover additional take-or-pay settlement costs not covered ! Primary proposal: Sixty-First Revised Sheet No. 4, Fourteenth Revised Sheet No. 7A, Fifth Revised Sheet No. 121, Second Revised Sheet No. 12J.1, and Original Sheet No. 121.2 to FERC Gas Tariff, First Revised Volume No. 1; and Tenth Revised Sheet No. 5 and Original Sheet Nos. 76D-76F to FERC Gas Tariff, Original Volume No. 1-A. 2 Alternate proposal: Alternate Sixty-First Revised Sheet No. 4, Alternate Fourteenth Revised Sheet No. 7A, Alternate Fifth Revised Sheet No. 121, Alternate Second Revised Sheet No. 121.1, and Alternate Original Sheet No. 12J.2 to FERC Gas Tariff, by Arkla's settlement of its previous Order No. 500 [FERC Statutes and Regulations ¶| 30,761] filing approved by the Commission in an order issued on October 31, 1990.3 In that settlement, Arkla agreed to absorb 33.3 percent of the take-or-pay costs covered by the settlement, recover 33.3 percent in a fixed charge to its sales customers, and recover the remaining amount in a volumetric surcharge to all customers. Since the parties to the settlement agreed to be bound by its terms regardless of the decision of the United States Court of Appeals for the District of Columbia in Associated Gas Distributors, Inc. v. FERC (AGD IŊ4 that the purchase deficiency allocation method violated the filed rate doctrine, the Commission has found that the settlement is final as to the take-or-pay recovery method agreed upon and First Revised Volume No. 1; and Alternate Tenth 3 Arkla Energy Resources, 53 FERC ¶ 61,127 (1990). 4893 F.2d 349 (D.C. Cir. 1989). 5 Mechanisms for Passthrough of Pipeline Takeor-Pay Buyout and Buydown Costs, order on clarification, 53 FERC ¶ 61,380 (1990). |