FERC Approves Leach/Rayne Projects and Launches Rate Investigations on NGPL and WIC

Today, the Federal Energy Regulatory Commission (FERC) approved two new natural gas pipeline infrastructure projects, and launched two new Section 5 rate investigations at their monthly open meeting.

All three Commissioners voted in a consent agreement to issue the Certificates of Public Convenience and Necessity for Columbia Pipeline Group/TransCanada's Rayne Xpress and Leach Xpress. Collectively, these projects account for approximately 1.5 BCF of new natural gas pipeline capacity. Following receipt and acceptance of Certificates, the projects will next need to submit implementation plans responding to the Commission's numerous environmental conditions referenced in the Orders, before receiving a Notice to Proceed with construction and tree clearing. The projects are still waiting on numerous cooperating agency permits from Ohio, Michigan, West Virginia and Pennsylvania.

In addition, FERC launched investigations regarding the Kinder Morgan subsidiaries Natural Gas Pipeline Company of America (NGPL) and Wyoming Interstate Natural Gas Company (WIC). FERC's annual review of Form 2 financial filings found that these companies may be over-recovering their costs, casting doubt on whether their rates are just and reasonable. The Commission found that WIC earned a 17.7% return in 2014 and a 19% return in 2015 while NGPL earned a return of 28.5% in 2014, then a return of 20.8% in 2015. Both companies have faced investigations before. NGPL and WIC have previously settled with their shippers for system-wide rate decreases. The companies were ordered to submit cost and revenue studies to FERC within seventy-five days. LawIQ's analysis of previous cases shows that Section 5 cases typically take about one-year to settle, and for the settlement to be approved by the FERC.