FERC Clarifies: Kern River Entitled to Recover Certain Compressor Costs- Deferred Depreciation Quantified as Regulatory Asset - in Period Two Rates

摘要

On 12/6/10 a FERC order addressed three related filings by Kern River Gas Transmission Co. with respect to one issue that arose in the ongoing litigation in its Docket No. RP04-274 rate case over the company's Period Two rates that track under a levelized structure separate rates for the terms of shippers' initial contracts (Period One), and for its remaining depreciable life (Period Two). The issue is whether Kern River may recover in its Period Two rates certain compressor costs that are stated as a regulatory asset in its Period One compliance filing dated 1/29/10. The three related filings are (1) a motion (RP04-274) for clarification filed on 9/28/10; (2) a proposed periodic rate adjustment surcharge filed by Kern River (RP10-1406)1 on 9/30/10; and (3) a filing (RP11-1499) to conditionally correct the prior 1/29/10 compliance filing in Docket RP04-274. FERC's clarification will serve the purpose of removing an unnecessary issue from the Period Two hearing.