On March 20, the Federal Energy Regulatory Commission (FERC) issued an order terminating FERC Form No. 501-G proceedings for 38 interstate natural gas pipeline companies. Last year, FERC moved to address the impact of the lower corporate tax rate (the Tax Juts and Jobs Act of 2017 lowered the corporate tax rate from 35 percent to 21 percent) by approving Order No. 849, which requires interstate pipelines to file a one-time report, called FERC Form No. 501-G, on the rate effect of the new tax law and changes to FERC’s income tax allowance policies. The 38 interstate natural gas pipeline companies have either filed a general Natural Gas Act (NGA) section 4 rate case, provided explanations as to why no rate change is necessary, or done nothing beyond filing the Form No. 501-G, and no party filed adverse comments with respect to their Form No. 501-G filings.
APGA was one of the first—if not the first—groups of pipeline customers to request that FERC take prompt action so that ratepayers would justly receive the rate benefit from lower federal income tax payments owed by the pipelines. APGA also filed comments in April in response to the proposed rule which, among other things, communicated that the vast amount of public gas systems are recourse rate shippers that rely on FERC to ensure that their rates are just and reasonable under the Natural Gas Act.
On March 20, FERC also opened an investigation under Section 5 of the Natural Gas Act to determine if Stagecoach Pipeline & Storage Company may be substantially over-recovering its cost of service, resulting in unjust and unreasonable rates. FERC has not yet determined a just and reasonable return on equity for Stagecoach, and therefore has set this issue, among others, for a hearing before FERC’s administrative law judges. FERC directed the company to file a cost and revenue study for the latest available 12-month period within 75 days of the issuance of its order.
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.