Blog Viewer

On January 3, APGA sent a letter to Chairman McIntyre of the Federal Energy Regulatory Commission (FERC), urging the Commission to act promptly to ensure that the recourse rates paid by customers of natural gas pipelines are reduced to reflect the lower corporate tax rate. The letter was sent in response to The Tax Cuts and Jobs Act of 2017, which was signed into law last month and lowered the corporate tax rate from 35 percent to 21 percent. However, all pipeline rates continue to recover from ratepayers an income tax allowance assuming a 35 percent rate.

Since APGA sent its letter, several other associations, including the Natural Gas Supply Association and American Forest and Paper Association, have followed up with their own letters that reference APGA’s letter. In its letter to the Commission, the Natural Gas Supply Association expressed support for APGA’s letter and request for immediate action on pipeline rates. They also stated that “many pipeline rates are by definition rendered unjust and unreasonable in light of the fact that current rates include an income allowance that no longer reflect the income tax rate that will be paid by the pipeline.” In its letter, the American Forest and Paper Association states that it is writing to align with the request filed by APGA and urges the Commission to “act promptly to ensure the pass through of the benefits of lower corporate tax rates and other provisions in the new tax law”.

A copy of APGA’s letter to Chairman McIntyre is available on the APGA website. For questions on this article, please contact Dave Schryver of APGA staff by phone at 202-464-2742 or by email at dschryver@apga.org.