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CONTACT: Charlotte LeGates
PHONE: 202/326-9316
FAX: 202/326-9334
E-MAIL: clegates@ngsa.org
Washington, DC--The Natural Gas Supply Association today filed a Motion to Intervene Out-Of-Time and
a Brief on Exceptions in the Koch Gateway Pipeline Co. proceeding at the Federal
Energy Regulatory Commission (FERC) regarding Koch Gateway Pipeline Company's
request for market-based rates. (Docket No. RP95-362)
"NGSA rarely is a party to pipeline-specific cases at the FERC," said Nicholas
Bush, president of NGSA. "In this case, however, we believe that the administrative
law judge (ALJ) misapplied and misinterpreted FERC's Alternative Rate Policy
Statement to the detriment of all pipeline customers in the lower-48 states.
Consequently, we had no choice but to ask to be a party to the Koch proceeding.
"NGSA is not opposed to market-based rates on interstate natural gas pipelines
when adequate competition is proven to exist," Bush continued. "We have never
previously opposed Commission decisions that have found market-based rates
appropriate because real competitive alternatives were found to exist.
"In this case, however," Bush emphasized, "the Judge's rationale, if applied
extensively, could lead erroneously to the conclusion that no pipeline in the U.S. has
market power."
Bush pointed out that the ALJ's decision could set such a bad FERC precedent
"because the judge failed to consider whether specific Koch customers had
economically viable pipeline alternatives that could provide a service comparable and
competitive to Koch's. Instead, the Judge decided that Koch should be allowed market-based rates because the average Koch customer could theoretically connect and
receive comparable service from neighboring pipelines. The judge did not consider
factors such as the availability of spare capacity on the neighboring pipelines.
"Neighboring pipelines that could or might be connected to a Koch customer are
of little practical value to customers negotiating for service with Koch," Bush said. "The
judge's inappropriate assessment of competitive alternatives, based on the average
possibility for service, gives no comfort to a pipeline customer dealing with a real
monopoly.
"The Koch system is in no way unique in its pipeline operations to justify such a
complete deviation from the Alternative Rates Policy Statement," Bush concluded.
"Koch conducts it business like every other pipeline in this country. The misapplication
of the Policy Statement to Koch could ultimately be detrimental for customers on all
interstate pipelines."
Copies of the NGSA motion can be obtained by clicking here; copies of the NGSA brief can be obtained by clicking here.
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This page was last updated October 14, 1997.