[Federal Register Volume 63, Number 68 (Thursday, April 9, 1998)]
[Notices]
[Page 17400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9297]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. GP98-22-000]
Kansas Natural Gas, Inc.; Notice of Report of Refunds and
Petition for Dispute Resolution and Procedural Adjustment
April 3, 1998.
Take notice that, on March 9, 1998, Kansas Natural Gas, Inc. (KNG)
filed:
(1) A report of (a) the refunds alleged to be owed to Northern
Natural Gas Company (Northern), under Docket No. RP98-39-000, K N
Interstate Gas Transmission Company (KNI) under Docket No. RP98-53-000,
and Colorado Interstate Gas Company (CIG), under Docket No. RP98-54-
000, (b) the refunds conditionally paid by KNG, and (c) the amounts set
aside by KNG; and
(2) A petition requesting (a) the Commission to resolve KNG's
dispute with Northern and CIG over KNG's Kansas ad valorem tax refund
liability, and (b) an adjustment of the Commission's refund procedures.
The Commission, by order issued September 10, 1997, in Docket No.
RP97-369-000 et al,\1\ on remand from the D.C. Circuit Court of
Appeals,\2\ required first sellers to refund the Kansas ad valorem tax
reimbursements to the pipelines, with interest, for the period from
1983 to 1988. KNG's petition is on file with the Commission and open to
public inspection.
---------------------------------------------------------------------------
\1\ See 80 FERC para. 61,264 (1997); order denying reh'g issued
January 28, 1998, 82 FERC para. 61,058 (1998).
\2\ 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).
---------------------------------------------------------------------------
KNG states that, following receipt of the Statements of Refunds Due
from the above-referenced pipelines, it contacted the subject pipelines
and provided them with information regarding the refund amounts
(principal and interest) attributable to each working interest owner.
KNG adds that it also provided the pipelines with the last known
mailing address of each working interest owner, that it requested
(consistent with Commission precedent \3\) that Statements of Refunds
Due be forwarded to the individual working interest owners, and that it
requested a revised Statement of Refunds Due from each pipeline,
limited to KNG's own individual working interest. KNG further states
that KNI agreed and submitted a revised Statement of Refunds Due to
KNG, on February 9, 1998, limited to KNG's working interest. KNG adds,
however, that Northern and CIG held that KNG is responsible for the
refunds attributable to the entire production.
---------------------------------------------------------------------------
\3\ See Robert F. White, 71 para. 61,185 (1995).
---------------------------------------------------------------------------
In review of the above, KNG's pleading includes a petition for
dispute resolution,\4\ requesting the Commission to:
---------------------------------------------------------------------------
\4\ In its January 28, 1998 Order Clarifying Procedures, the
Commission stated that producers (i.e., first sellers) could file
dispute resolution requests with the Commission, asking the
Commission to resolve the dispute with the pipeline over the amount
of Kansas ad valorem tax refunds owed, see 82 FERC para. 61,059
(1998).
---------------------------------------------------------------------------
(1) Direct Northern and CIG to (a) provide a revised Statement of
Refunds Due to the individual working interest owners, and (b) provide
KNG with a revised Statement of Refunds Due, limited to KNG's own
individual working interest;
(2) Find, based on the Commission's decision in Williams Natural
Gas Co., 70 FERC para. 61,380 at 62,119 (1995), that certain Kansas ad
valorem tax reimbursements are not subject to refund, because the
addition of those amounts to the price paid did not exceed the
applicable maximum lawful price; and
(3) Expressly approve the conditional nature of payments that KNG
has already made to each pipeline.
KNG's pleading also includes a petition for an adjustment of the
Commission's refund procedures. Specifically, in lieu of placing
disputed amounts escrow accounts, KNG requests permission to place such
amounts into an interest-bearing fund over which it will maintain
control. KNG states that it agrees, subject to the conditional nature
of any payments made, to disburse funds in accordance with any
subsequent order of the Commission in these proceedings. KNG argues
that this approach:
(1) Will not harm or disadvantage any party;
(2) Will not affect the ultimate level of refunds provided; and
(3) Will relieve KNG of the burden and associated cost of
establishing formal escrow accounts.
KNG also states that the Commission's orders in the Kansas ad
valorem tax refund proceedings permit the affected parties (i.e.,
working interest owners) to establish the uncollectability of amounts
attributable to royalty owners, on a case-by-case basis, and in
accordance with the standards in Wylee Petroleum Corporation, 29 FERC
para. 61,014 (1985). KNG informs the Commission that KNG intends to
pursue this option, and that KNG has placed all amounts attributable to
royalty owners in escrow.
Any person desiring to comment on or make any protest with respect
to said petition should, on or before April 24, 1998, file with the
Federal Energy Regulatory Commission, 888 First Street, N.E.,
Washington, D.C. 20426, a motion to intervene or protest in accordance
with the requirements of the Commission's Rules of Practice and
Procedure (18 CFR 385.214 or 385.211). 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 the
proceeding, or to participate as a party in any hearing therein, must
file a motion to intervene in accordance with the Commission's Rules.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 98-9297 Filed 4-8-98; 8:45 am]
BILLING CODE 6717-01-M
