Accounting Litigation

On January 16, the DC Circuit heard oral arguments in INGAA’s challenge to FERC’s orders requiring the expensing of costs incurred to comply with the Pipeline Safety Act of 2002.  The appeal focuses principally on the baseline testing (i.e., smart pigging) and data integration costs, and the thrust of our argument is that those costs are properly capitalized as part of OPS’s “Integrity Management Program.” That program then becomes the base for all subsequent testing and is, in effect, a regulatory assetFERC’s position is that the OPS testing and data integration is all just fancy maintenance that should get ordinary maintenance expense treatment.  We expect a decision in a month or two.