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FERC OKs ANR Pipeline settlement over rate increase

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FERC OKs ANR Pipeline settlement over rate increase

FERC approved an uncontested settlement that resolved all issues in a Natural Gas Act Section 4 rate case filed by ANR Pipeline Co.

A Dec. 15 FERC order concluded that the proposed settlement will resolve all the issues raised in the rate case and that it "appears to be fair, reasonable and in the public interest."

An ANR proposal filed at the beginning of 2016 to increase natural gas transportation and storage rates had prompted an investigation by the commission and challenges by pipeline customers. The rates were based on a cost of service of approximately $924.95 million and a total rate base of $1.85 billion. The pipeline company's overall rate of return of 11.89% is based on a return on equity of 14.19%, a capital structure of 65% equity and 35% long-term debt, and a cost of debt of 7.63%.

As part of the settlement, ANR, a subsidiary of TransCanada Corp. committed to spending at least $837 million over a three-year period ending Dec. 31, 2018, on reliability and modernization projects. The settlement "mandates that ANR must meet with its customers annually to discuss the planned capital expenditures," the order said.

The settlement was supported by the Northern States Power Co., Northern States Power Co. - WI, Southwestern Public Service Co., Antero Resources Corp. and commission trial staff. Gulfport Energy Corp. did not oppose the settlement. (FERC docket RP16-440)