APGA Calls for Passage of Legislation to Reform Section 5 of the Natural Gas Act

By Dave Schryver posted 02-07-2019 11:36 AM

On February 5, APGA sent a letter to the Chairmen of the House Ways and Means Committee and the House Energy and Commerce Committee calling for Congress to examine how interstate pipelines are retaining the tax windfall created by the lowering of the corporate tax rate (from 35 percent to 21 percent) as provided in the Tax Cuts and Jobs Act of 2017. As communicated in the letter, the failure of Congress to amend Section 5 of the Natural Gas Act (NGA), in the same manner in which it amended the Federal Power Act, has resulted in natural gas consumers being annually overcharged hundreds of millions of dollars by regulated interstate pipelines. APGA has long maintained that the current regulatory process, which is intended to ensure just and reasonable rates for consumers under the NGA, is broken due to the absence of refund relief. Under NGA Section 5, pipelines are able to largely frustrate the ability of the Federal Energy Regulatory Commission (FERC) to get just and reasonable rates into place in a timely fashion.

In a statement that accompanied the release of the letter, APGA’s President & CEO, Bert Kalisch, stated, “We strongly urge Congress to pass legislation that would correct the inequity resulting from FERC’s lack of refund authority under NGA Section 5. A broad coalition of energy users, natural gas producers, agricultural groups and consumer groups have supported the passage of legislation allowing the Commission to set a refund-effective date commensurate with either the date the Commission initiates a Section 5 proceeding or the date a consumer complaint is filed under Section 5; and allow the Commission to treat regulated pipelines just as it currently treats electric utilities under the Federal Power Act.”

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.