determinants in effect as of the effective date of the PGA filing.

(D) Panhandle shall file revised rates, within 30 days of issuance of this order, to reflect the proper pipeline supplier rate in its ANGTS rate adjustment.

(E) Acceptance of Panhandle's filing is subject to the outcome of the proceedings in Docket Nos. TA90-1-28-000, TA89-1-28-000, and RP88-262-000, et al.

(F) Panhandle shall correct the errors detailed in the Appendix by filing a revised electronic version of portions of FERC Form No. 542-PGA (Revised) as indicated in the Appendix, within 30 days of the date of issuance of this order.

Appendix

FERC Form No. 542-PGA (Revised) Errors Panhandle Eastern Pipeline Co. Docket No. TA91-1-28-000

Schedule C2

1. In the electronic version of Schedule C2, Record Type 01 (reporting carrying charges on Demand 2), amounts were entered in the wrong fields at sequence numbers 000013 through 000024. The Subtotal was entered as the Balance Net of Deferred Taxes. Deferred Taxes were entered as Other Adjustments. The Net Balance was entered as Quarterly Carrying Charges. Monthly Carrying Charges were missing. Every carrying charge factor at the referenced sequence numbers was .0085. The electronic version of Schedule C2, Record Type

01, should be refiled to correct for these errors, along with a Schedule G1 to assist in processing the filing. Schedule G-1 should be resubmitted in order to process these corrections.

2. Panhandle reported carrying charge calculations separately for Demand 1 and Demand 2. These two schedules should have been combined and reported under "Account No. 191 Balance Exclusive of the Balance of Refunds and Revenue Credits." Details breaking out the individual carrying charge calculations should be submitted as working papers on Schedule D1 in the format of Schedule C2. In future proceedings, Panhandle should file FERC Form No. 542-PGA (Revised) in accord with this requirement.

Schedule C1

Panhandle did not enter adjusted balances on Schedule C1, Record Type 01, where appropriate. Adjusted balances should be provided in future filings of FERC Form No. 542-PGA (Revised).

Schedule D1, Code 9, Working Paper 001, Page 2

The Demand 2 billing determinant on the electronic filing, 159,162,423, does not coincide with the Demand 2 billing determinant of 156,562,423 reflected on the paper filing. This error has no impact since 159,162,423 was not used in computations. In future filings of FERC Form No. 542-PGA (Revised), Panhandle should ensure that the electronic version exactly matches the paper version.

tomers proportionate amounts of the proceeds of a judgment Louisiana obtained against United Gas Pipe Line Company (United).2 The order found that a proportionate amount of the

result of this failure, Louisiana P&L had incurred higher fuel costs which were passed on to its customers. In its earlier orders in this proceeding, the Commission concluded that a portion of the judgment proceeds that United paid to Louisiana P&L reflected compensation for these higher fuel costs which were

judgment proceeds should be passed on to Louisiana P&L's wholesale customers, Cajun Electric Power Cooperative, Inc. (Cajun) and Louisiana Energy and Power Authority (Louisiana Energy), and directed Louisiana P&L to submit, by August 1, 1990, a plan to distribute a proportionate amount of the judgment proceeds to the wholesale customers.

On August 10, 1990, Louisiana P&L filed a proposal to adopt the refund allocation ordered by the Louisiana Public Service Commission (Louisiana Commission), which, according to Louisiana P&L, results in a refund to wholesale customers of the entire amount of the proceeds not previously allocated to Louisiana P&L's retail customers. Notice of the filing was published in the Federal Register,3 with comments, protests, or motions to intervene due on or before August 31, 1990.

On August 30, 1990, Cajun filed comments, consenting to Louisiana P&L's proposal only if it is modified to require the payment of interest from October 24, 1988, the date Louisiana P&L received the judgment proceeds, to the date Cajun receives the refund, with the interest calculated at the rate of interest specified in section 35.19a of the Commission's regulations. If Louisiana P&L does not accept Cajun's condition, Cajun requests that the Commission find that Louisiana's proposal is not an uncontested settlement pursuant to Rule 602(g) of the Commission's Rules of Practice and Procedure, but is a contested settlement pursuant to Rule 602(h).5

On August 30, 1990, Louisiana Energy filed comments stating that, although it is entitled to interest, it will accept Louisiana P&L's proposal to avoid additional delay and legal

expense.

On September 5, 1990, Louisiana P&L submitted an alternative plan to refund about $6.4 million to Cajun and Louisiana Energy. Notice of the filing was published in the Federal Register, with comments, protests, or motions to intervene due on or before October 18, 1990.

On September 10, 1990, Louisiana P&L also filed a response to the comments of Cajun and Louisiana Energy, arguing that Louisiana P&L should not have to pay interest because it has not had any portion of the judgment proceeds (Footnote Continued)

passed on to its wholesale customers. Accordingly, the Commission ordered Louisiana P&L to submit a refund plan providing for refunds to its wholesale

for its own use and benefit. If the Commission does not unconditionally approve its original proposal, or if any affected customer fails to consent, Louisiana P&L requests that the Commission instead adopt Louisiana P&L's alternative refund plan with respect to such customer.

On September 10, 1990, Cajun submitted reply comments to Louisiana Energy's comments. Cajun reiterates the arguments it made in its August 30, 1990 comments, and requests that the Commission "discount" the position taken by Louisiana Energy.

On October 1, 1990, the Louisiana Commission filed a motion to file comments out-of-time and a reply to the comments on the offer of settlement. The Louisiana Commission contends that Cajun and Louisiana Energy are not entitled to any interest because the Louisiana Commission's wholesale allocation "is generous in that it gives the benefit of the doubt to the wholesale jurisdiction" of certain disputed costs. The Louisiana Commission also states that the payment of interest is inappropriate because: (1) its allocation provides Cajun and Louisiana Energy with all of the judgment proceeds properly allocable to the wholesale jurisdiction; and (2) Louisiana P&L did not earn interest on 99.6 percent of those funds because the Louisiana Commission ordered it to use those funds as a rate base reduction.

On October 18, 1990, Cajun and Louisiana Energy filed protests to Louisiana P&L's alternative refund plan, requesting that the plan be rejected because it understates the refunds due to the wholesale customers. On November 30, 1990, Louisiana Energy filed a motion for expedited consideration and acceptance of Louisiana P&L's offer.

Discussion

With respect to the passthrough of fuel supplier refunds, we find that, while we are not required to abide by the findings of retail regulators, the findings of retail regulators should be given considerable weight. The original refund plan proposed by Louisiana P&L tracks retail rate treatment and is consistent with the plan required for retail customers. Moreover, except for Louisiana P&L's failure to provide for the payment of interest, Cajun and Louisi

5 18 C.F.R. § 385.602 (1990).

655 Fed. Reg. 41,751 (1990).

7 Louisiana Power & Light Company, 23 FERC ¶61,376, at p. 61,794 (1983); accord, Arkansas Power & Light Company, 51 FERC ¶ 61,047, at p. 61,100 & n.17, reh'g denied, 52 FERC ¶ 61,029 (1990).

ana Energy support and consent to this plan. In addition, the Commission finds that this plan is reasonable because it allocates refunds to customer groups based on their energy usage during the period of fuel overcharges. Accordingly, this plan will be approved, but will be modified to provide for the payment of interest as outlined below.

Louisiana P&L objects to the payment of interest, and argues that interest is only required on refunds of amounts collected under rates that have been suspended. But interest is also appropriate where excessive charges have been passed through a formula rate such as the fuel adjustment clause involved in this case.8 The Louisiana Commission supports Louisiana P&L's objection to the payment of interest on grounds that Louisiana P&L did not benefit from the time value of the monies because the Louisiana Commission directed Louisiana P&L to use essentially the entire judgment proceeds as a retail rate base reduction. However, the Louisiana Commission's order recognized that some portion of the judgment proceeds would ultimately be flowed on to wholesale customers, and so made express provision that the rate base reduction it was ordering would be subject to subsequent adjustment to exclude the wholesale share and to reflect only that portion of the judgment proceeds allocated to retail ratepayers. The Louisiana Commission's order stated:

The [Louisiana] Commission recognizes that the exact amount of the United settlement proceeds is uncertain because of claims that may be made by extrajurisdictional customers. The amortization plan will be adjusted to reflect the amount that ultimately is determined to be the Louisiana jurisdictional portion of these proceeds.

Consequently, Louisiana P&L ultimately will not have to make a retail rate base reduction for the wholesale portion of the judgment pro

8 See, e.g., Electric Cooperatives of Kansas, 14 FERC 61,176, at p. 61,320 (1981); Public Service Company of New Hampshire, 6 FERC ¶ 61,299, at p. 61,715, reh'g denied, 9 FERC ¶ 61,202 (1979), Southern California Edison Company, 3 FERC ¶ 61,075, at p. 61,215, reh'g denied, 3 FERC ¶ 61,302 (1978).

9 We note that the Louisiana Commission directed Louisiana P&L in the first instance to use essentially the entire judgment proceeds and not just the retail share of these proceeds as a retail rate base reduction. That retail ratepayers may have benefitted ab initio from the wholesale share of the proceeds should not deprive wholesale customers of what they are reasonably entitled to.

10 It is worth noting that Louisiana P&L explicitly requested the Commission to defer acting pending

ceeds and will not have to refund same amount twice once to retail ratepayers and once to wholesale ratepayers. But regardless of whether the company benefitted from the time value of the monies, 10 the wholesale customers are entitled to the time value of the monies collected from them in the past that are only now being refunded and so are only now available for use.11 Cajun's request that Louisiana P&L be directed to pay interest for the period between the date it received the judgment proceeds from its supplier and the date it passes the judgment proceeds on to its wholesale customers will therefore be granted.

The Commission orders:

(A) The Louisiana Commission's comments are hereby accepted for filing.

(B) Within 30 days of the date of this order, Louisiana P&L shall refund to Cajun and Louisiana Energy $7.5 million, plus interest determined in accordance with the discussion in the body of this order. Within 15 days thereafter, Louisiana P&L shall file a refund report showing the computation of the refunds and interest for Cajun and Louisiana Energy. If at the time the refunds are due, a request for rehearing is pending, the refunds and refund report shall be made 15 and 30 days respectively, after the Commission disposes of the request for rehearing. A copy of the report shall be sent to the affected customers and state commissions.

a decision by the Louisiana Commission. 51 FERC, at p. 61,374. Accordingly, since Louisiana P&L was itself responsible for the wholesale customers being deprived of the use of their monies for some period of time, it would be unfair not to hold Louisiana P&L responsible for the time value of the monies and inequitable not to compensate the wholesale customers for the time value of the monies.

11 See generally, e.g., Public Service Company of New Mexico, 48 FERC ¶ 61,376, at p. 62,548 (1989); Arizona Public Service Company, 35 FERC ¶ 61,357, at p. 61,816 (1986); Floridà Gas Transmission Company, 34 FERC ¶ 61,232, at p. 61,402, modified, 34 FERC ¶ 61,379, clarified, 35 FERC ¶ 61,211 (1986).

12 23 FERC at p. 61,794.

sion's orders in Docket No. RP88-267-000 does not concern the threshold legality of the purchase deficiency method, but rather is limited to the issues it preserved on rehearing relating to the Commission's decision to include interruptible sales in the calculation of the customers' purchase deficiencies. Thus, they contend, South Georgia's use of the method itself is final and nonappealable and only the details of how the method should be implemented remain to be resolved on appeal. They argue that the Commission relied on similar findings to exempt Northwest Pipeline Corporation from the stay in the same December 14 order and for the same reasons should exempt South Georgia.

Atlanta and the Gas Section argue that, in these circumstances, the Commission's orders are binding and South Georgia does not have the discretion to file rates that use a different allocation method to recover the costs it was permitted to collect in the orders. Furthermore, they assert that the filed rate doctrine prohibits the Commission from giving retroactive effect to a revised recovery mechanism. Finally, Atlanta and the Gas Section assert that customers, as well as the pipeline, should be entitled to seek clarification in response to the Commission's invitation and establish whether a filing should be exempted from Order No. 528, since they are subject to the fixed charges.

The Commission grants the requests for rehearing. It finds that South Georgia's filing is final and nonappealable on the issue of the filed rate doctrine. South Georgia's use of the purchase deficiency allocation method in Docket No. RP88-267-000 was never challenged on filed rate doctrine grounds after the Commission issued its suspension order accepting the filing and requiring the use of the purchase deficiency allocation method. Neither South Georgia nor any customer sought rehearing of the Commission's orders on the grounds that the purchase deficiency allocation method violated the filed rate doctrine. The requests for rehearing, including South Georgia's, only raised issues concerning the implementation of the purchase deficiency allocation method. South Georgia's rehearing request concerned primarily the Commission's decision to require that interruptible purchases be included in the calculation of purchase deficiencies. Only South Georgia filed an appeal with the court, and that appeal raised only the issue it had raised on rehearing.

5 South Georgia Natural Gas Co., 45 FERC 161,115 (1988); reh'g denied, 46 FERC ¶ 61,083 (1989).

6 South Georgia Natural Gas Co., 45 FERC 161,115, at pp. 61,360-61,361.

Under similar circumstances, the Commission found in its December 14 order that all issues concerning whether the purchase deficiency method used in filings that Northwest requested to be exempt from Order No. 528's stay, including the filed rate doctrine issue, were finally resolved by the suspension order that accepted its proposed rates. Accordingly, the Commission found that Northwest should be exempt from Order No. 528. For the same reasons, the Commission finds that South Georgia's use of the purchase deficiency allocation method is final and nonappealable. See Town of Norwood v. FERC, 906 F.2d 772 (D.C. Cir. 1990), holding that failure to file a request for rehearing on the issue of the filed rate doctrine bars a party from raising the issue before the

court.

In these circumstances, the Commission does not believe that South Georgia should be permitted to change its allocation method solely because the court in AGD II has found that that allocation method violates the filed rate doctrine. The purpose of the filed rate doctrine is to protect a pipeline's customers and permit them to make purchasing decisions in reliance on rates of which they have notice. As the court explained in Columbia Gas Transmission Corp. v. FERC (Columbia II), 895 F.2d 791 (D.C. Cir. 1990), the purpose of the rule is "to maintain predictability in the rates that will be charged, and this purpose is accomplished by the guarantee that rate changes will be made only prospectively." This predictability is necessary to enable the pipelines' customers to make rational purchasing decisions on knowledge of the cost of the gas they are receiving. As the court stated in Columbia Transmission Corp. v. FERC (Columbia I), 831 F.2d 1135 (D.C. Cir. 1987), "purchasers. . . cannot plan their activities unless they know the cost of what they are receiving." Therefore, in this context, the filed rate doctrine is intended to protect South Georgia's customers, not South Georgia itself.

Accordingly, the Commission does not believe that South Georgia should be permitted to change the purchase deficiency allocation method, which the Commission has already found produces the most equitable allocation of costs on South Georgia's system, solely because it violates the filed rate doctrine. Whether it violates the filed rate doctrine is a legal issue which only the customers could assert, since the doctrine is designed to protect only the customers. The customers having chosen not to

7 Associated Gas Distributors v. FERC, 893 F.2d 349 (D.C. Cir. 1989), cert. denied, FERC v. Associated Gas Distributors, 59 U.S.L.W. 3271 (Oct. 9, 1990).