The Interstate Natural Gas Association of America (“INGAA”), pursuant to Rule 213 of the Federal Energy Regulatory Commission’s (“FERC” or “Commission”) Rules of Practice and Procedure and the Commission’s February 7, 2018 notice, submits this Answer opposing the Petition for Initiation of Show Cause Proceedings Directed to Interstate Natural Gas Pipelines and Storage Companies submitted in the captioned docket (“Petition”).
INGAA is a trade association that advocates regulatory and legislative positions of importance to the interstate natural gas pipeline industry. INGAA’s 27 members represent the majority of interstate natural gas transmission pipeline companies in the United States. Its United States members are regulated by the Commission pursuant to the Natural Gas Act, 15 U.S.C. §§ 717-717w. INGAA’s members, which operate approximately 200,000 miles of pipelines and greater than 10,000 storage wells, provide an indispensable link between natural gas producers and consumers.
The Commission should reject the Petitioners’ request to circumvent the requirements of Section 5 of the Natural Gas Act (“NGA”), and address the impacts of tax reform on pipeline rates in a manner consistent with its established practice and legal precedent for action pursuant to NGA Section 5. INGAA supports the NGA’s objective of ensuring just and reasonable natural gas transportation rates. To ensure the justness and reasonableness of rates, the NGA requires the Commission to follow specific procedural steps and consider the numerous factors that affect pipelines’ rates. NGA Section 5 places the burden of justifying a change to an existing rate on the proponent of the change, a requirement that the Petitioners want the Commission to ignore. The Petition requests the Commission to impermissibly shift the burden established by Section 5 and to engage in piecemeal rate revisions, which is inconsistent with the requirements of NGA Section 5.
The proposed “one-size-fits-all” approach suggested by Petitioners is inconsistent with the applicable statutory framework and inappropriate for interstate natural gas pipelines. The Commission’s policies have fostered intense competition in the interstate natural gas transportation market, which has resulted in many pipelines contracting at negotiated and discounted rates that frequently do not recover the pipelines’ full costs. Many pipelines and customers also have reached rate settlements designed to provide rate certainty for a defined moratorium period. The Commission should avoid generic actions that isolate individual cost components without accounting for individual pipelines’ diverse business and financial circumstances, the comprehensive review of all cost and revenue components, and existing rate case moratoria.