Northern and Panhandle Eastern Are Left on the Hook for Ad Valorem Tax Refunds Passed to Customers That Burlington Resources Had Been Held Liable for but Insulated Itself from Pursuant to Individually Negotiated Settlements

摘要

Pursuant to an order denying rehearing, FERC on 8/11/09 told Panhandle Eastern Pipe Line Co. (RP98-40) and Northern Natural Gas Co. they still must return ad valorem tax-related refunds tunneled to them by Burlington Resources Oil & Gas Co. (GP99-15) and cannot recoup any of the amount already distributed to their customers. Their liability remains, according to the Commission, because they had agreed in settlements to assume Burlington's refund liability in exchange for valuable consideration (i.e., relief from lingering take-or-pay problems), among other reasons. For instance, the Commission explained in this order at one point that there was nothing in the Order Nos. 500/528 policies to prevent a pipeline from agreeing by settlement to absorb a greater share of its take-or-pay settlement costs than Commission policy required. Take-or-pay settlements remain binding on the parties, despite subsequent complaints that the settlements contain provisions that were contrary to policy. A consenting party cannot complain, or a take or pay settlement cannot be modified, simply because it later appears that "the result is not as good as it ought to have been."