[Federal Register Volume 63, Number 58 (Thursday, March 26, 1998)]
[Notices]
[Pages 14692-14693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7849]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. SA98-29-000]
Kaiser-Francis Oil Company; Notice of Petition for Adjustment
March 20, 1998.
Take notice that on March 9, 1998, Kaiser-Francis Oil Company
(Kaiser) filed a petition for adjustment under section 502(c) of the
Natural Gas Policy Act of 1978 (NGPA),\1\ requesting that the
Commission: (1) Grant an adjustment to its procedures to allow Kaiser
to defer payment of principal and interest attributable to royalties
for one-year until March 9, 1999; and (2) Grant a procedural adjustment
to allow Kaiser to place into an escrow account: (i) amounts
attributable to royalty refunds which have not been collected from the
royalty owner (principal and interest); (ii) interest on royalty
amounts which have been recovered from the royalty owners (the
principal of which was refunded); and (iii) interest on the total
amount of refunds allegedly due (excluding royalties). The March 9,
1998, deadline was established for first sellers to remit refunds of
Kansas ad valorem taxes to their pipeline purchasers, as required by
the Commission's September 10, 1997 order in Docket Nos. GP97-3-000,
GP97-4-000, GP97-5-000, and RP97-369-000.\2\ Kaiser's petition is on
file with the Commission and open to public inspection.
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\1\ 15 U.S.C. 3142(c) (1982).
\2\ See 80 FERC para. 61,264 (1997); order denying reh'g issued
January 28, 1998, 82 FERC para. 61,058 (1998).
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The Commission's September 10 order on remand from the D.C. Circuit
Court of Appeals \3\ directed first sellers under the NGPA to make
Kansas ad valorem tax refunds, with interest, for the period from 1983
to 1988. The Commission issued a January 28, 1998 order in Docket No.
RP98-39-001, et al. (January 28, Order),\4\ clarifying the refund
procedures, stating that producers could request additional time to
establish the uncollectability of royalty refunds, and that first
seller may file requests for NGPA section 502(c) adjustment relief from
the refund requirements and the timing and procedures for implementing
the refunds, based on the individual
[[Page 14693]]
circumstances applicable to each first seller.
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\3\ Public Service Company of Colorado v. FERC, 91 F.3d 1478
(D.C. 1996), cert. denied, Nos. 96-954 and 96-1230 (65 U.S.L.W. 3751
and 3754, May 12, 1997).
\4\ 82 FERC para. 61,059 (1998).
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Kaiser states it is substantially and adversely affected by the
potential Kansas ad valorem tax refund requirement. Kaiser is not
seeking to relieve itself of that refund obligation. Rather Kaiser
seeks to establish procedures which ensure: (a) That it pays only that
which is legitimately owned; and (b) that if it is subsequently
determined that its refund liability was less than that originally
claimed by Panhandle Eastern Pipe Line Company (Panhandle) in Docket
No. RP98-40-000, it can recover the overpayment. Accordingly, Kaiser
requests an adjustment to the general refund procedures to permit it to
pay the following amount into an escrow account: (a) the principal and
interest on the uncollected royalties; and (b) interest on amounts not
disputed herein other than amounts listed in (a) above.
Kaiser states that with respect to the royalty amounts of the
alleged refunds due, Kaiser has been working diligently to determine
its potential refund liability and to obtain contribution from its
royalty owners. However, Kaiser has not been able either to obtain
reimbursement or confirm the uncollectibility of the vase majority of
its royalty amounts for which refunds are due. Rather than deferring
royalty refunds, Kaiser would prefer to pay the amount of the refunds
which its believes may be uncollectible into an escrow account.
Accordingly, Kaiser intends to place the amount of $33,830.61
(reflecting all royalties and related interest) into its escrow account
and hereby requests all necessary approval to do so. Kaiser requests a
one-year extension of the refund due date for the purpose of allowing
it to try to collect the royalty refunds. In addition, Kaiser seeks
authorization to place the following amounts into its escrow account:
(a) the interest on the royalty refunds, the principal of which is paid
to Panhandle; and (b) the interest on refunds due (other than
royalties), in the amount of $64,627.10. Kaiser intends to place these
amounts in its escrow account on March 9, 1998, and requests
appropriate adjustment relief to authorize that plan.
Kaiser states that although there are issues relating to portions
of the principal refunds which are pending before the Court,\5\ to
demonstrate its good faith in these proceedings Kaiser has paid the
principal amount of refunds attributable to Kaiser's working interest
in the amount of $39,912.22 to Panhandle. Should the Commission provide
assurances that kaiser will be able to recover any overpayments without
having to initiate a prompt return of refund amounts determined not to
be due (such return of refunds not dependent upon recovery from
consumers), Kaiser would agreed to waive this request for escrowing
certain monies. Without such assurances, Kaiser is entitled to have its
property protested until the issue of liability has been fully resolved
in Courts or Congress.
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\5\ See, Case No. 98-60043, United States Court of Appeals for
the Fifth Circuit in Anadarko Petroleum Corp. v. FERC, and Union
Pacific Resources Company v. FERC.
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Any person desiring to be heard or to make any protest with
reference to said petition should on or before 15 days after the date
of publication in the Federal Register of this notice, file with the
Federal Energy Regulatory Commission, 888 First Street, N.E.,
Washington, D.C. 20426, a motion to intervene or a protest in
accordance with the requirements of the Commission's Rules of Practice
and Procedure (18 CFR 385.214, 385.211, 385.1105, and 385.1106). All
protests filed with the Commission will be considered by it in
determining the appropriate action to be taken but will not serve to
make the protestants parties to the proceeding. Any person wishing to
become a party to a proceeding or to participate as a party in any
hearing therein must file a motion to intervene in accordance with the
Commission's Rules.
David P. Boergers,
Acting Secretary.
[FR Doc. 98-7849 Filed 3-25-98; 8:45 am]
BILLING CODE 6717-01-M
