California Public Utilities Commission Blasts 'Huge' Rate Increase Sought by El Paso Natural Gas and Takes Pipeline to Task for Using the Economic Crisis to Elicit Sympathy

摘要

The California Public Utilities Commission (CPUC) is the first party to protest the rate case filing at FERC last week on September 30 by El Paso Natural Gas Co. (EPNG) (RP10-1398) and to request a full suspension and a hearing. On September 30, El Paso submitted the instant rate case on the earliest date permitted by the 2008 partial settlement (RP08-426) approved by FERC on 4/28/10. Pursuant to the settlement, El Paso could file a new Section 4 general rate filing for rates to be effective as early as 4/1/11 and must file for rates to be effective no later than 4/1/12. El Paso seeks a total cost of service (revenue requirement) of $613 million, lower than the amount El Paso requested in the previous rate proceeding. However, El Paso also asserts that the level of firm transportation (FT-1) substantially decreased, at least partially due to the most severe recession in the U.S. in the last 80 years. As a result of the lower flow volume, El Paso is filing for a rate increase of approximately 31% in firm transportation rates to California, and an even larger percentage increase in FT-1 rates to other rate zones. The CPUC noted in its protest that El Paso (CP10-510) also is requesting authorization to abandon two compressors that provide 222 MMcf/d of capacity over El Paso's southern system to California, and El Paso intends to abandon or mothball additional facilities. The test year and base period for the current rate proceeding will include the costs of these facilities, which are currently in service. Also, El Paso announced it is making a "voluntary" $20 million reduction in its requested revenue requirement in this proceeding to reflect the costs of these facilities that El Paso hopes to abandon after the test year and base period.