[Federal Register Volume 63, Number 108 (Friday, June 5, 1998)]
[Notices]
[Pages 30736-30737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14968]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. RP97-369-003, RP98-39-006, RP98-40-005, RP98-42-004, RP98-
43-004, RP98-52-005, RP98-53-005 and RP98-54-006]
Public Service Company of Colorado, et al., Northern Natural Gas
Company, Panhandle Eastern Pipe Line Company, ANR Pipeline Company,
Anadarko Gathering Company, Williams Natural Gas Company, KN Interstate
Gas Transmission Company, and Colorado Interstate Gas Company; Notice
of Motion for Waiver
June 1, 1998
Take notice that on May 19, 1998, Graham-Michaelis Corporation;
Kansas Petroleum, Inc.; John W. LeBosquet; The Trees Oil Company;
Pickrell Drilling Company; R.J. Patrick d/b/a/ R.J. Patrick Operating
Company; Quinque Operating Company; Quinque Oil & Gas Producing
Company; Lester Wilkonson; Kaiser-Francis Oil Company, CLX Energy,
Inc.; Banks Oil Co.; Hummon Corporation; Osborn Heirs Company; Cabot
Oil & Gas Corporation; Dorchester Hugoton, Ltd.; Ensign Oil & Gas Inc.;
Helmerich & Payne, Inc.; Midgard Energy Company; and Pioneer Natural
Resources USA, Inc. [jointly referred to herein as Producers], filed a
motion pursuant to Rule 212 of the Commission's Rules of Practice and
Procedure [18 CFR 385.212], where each request that the Commission
grant a waiver of the refund liability in these proceedings which is
attributable to their respective royalties based on the enactment of
Section 7 of Kansas House Bill No. 2419. In the alternative, the
Producers request that the Commission grant generic relief of the same.
In either case, the Producers request that the Commission direct the
pipelines to return any refunds paid previously by the Producers
pursuant to the Commission's prior orders which are attributable to
such royalties, with interest at the Commission's prescribed rates.
The Producers state that the captioned proceedings involve the
Commission's directives that first sellers refund Kansas ad valorem
taxes paid over the period 1983 to 1988, based on the decision of the
United States Court of Appeals for the District of Columbia Circuit in
Public Service Company of Colorado v. FERC.\1\ In addition, the
Commission's general refund orders were issued in Public Service
Company of Colorado, et al., Docket No. RP97-369 (Commission
Orders).\2\ It is stated that the individual cases captioned above were
commenced upon the filing by the individual pipelines of a Statement of
Refund Due.
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\1\ 91 F.3rd 1478 (1996), cert denied, 65 USLW 3751 and 3754
(May 12, 1997) (PSC of Colorado).
\2\ 80 FERC para. 61,624 (1997) and 82 FERC para. 61,058 (1998).
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In June 1997 producers (including many submitting the motion) filed
a request that the Commission waiver royalties that were unrecoverable.
The Producers state that in PSC of Colorado, the Commission recognized
that there may be situations where producers are unable to collect
refunds attributable to royalty interest owners.\3\ However, the
Producers note that the Commission determined that it would not grant a
generic waiver of uncollectible royalties, but rather would consider
waiver of a refund on grounds of uncollectibility from royalty owners
on a case-by-case basis, if a person seeking such relief can
demonstrate that it attempted to collect the refund from the royalty
owner and that the refund is uncollectible.\4\ The Producers contend
that the Commission ruled that the standard for uncollectibility would
be that set forth in Wylee Petroleum Corporation.\5\
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\3\ 80 FERC para. 61,264 at 61,953 (1997).
\4\ Id.
\5\ 33 FERC para. 61,014 (1985).
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The Producers state that on April 20, 1998, the Governor of Kansas
signed into law House Bill No. 2419, which went into effect on April
30, 1998. They contend that the enactment of the House Bill makes
refunds under the
[[Page 30737]]
Commission Orders attributable to royalty payments in the 1983 to 1988
period unrecoverable. The Producers state that any attempts by first
sellers to seek such recovery now violates Kansas law. The Producers
argue that the standard for uncollectibility under Wylee has now been
met, and the Commission has the authority to grant adjustment relief in
the form of a waiver of uncollectible refunds.
Using procedures described by the Commission in its order, the
Producers claim they implemented efforts over the past six months to
recover Kansas ad valorem tax refunds from the royalty owners during
the 1983-88 period. However, Kansas House Bill No. 2419 now legally
bars such efforts by the Producers to recover refunds attributable to
royalties. The Producers state that under Section 7(b) of the law:
No first seller of natural gas shall maintain any action against
royalty interest owners to obtain refund of reimbursements for ad
valorem taxes attributable to royalty interests, ordered by the
Federal Energy Regulatory Commission.
Further, the Producers state that Sections 7(c)(1) and (c)(2)
provide:
It is hereby declared under Kansas law:
(1) The period of limitation of time for commencing civil
actions to recover such refunds attributable to reimbursements of ad
valorem taxes on royalty interests during the years 1983 through
1988 has expired and such refunds claimed to be owed by royalty
interest owners are uncollectible;
(2) first sellers of natural gas are prohibited from utilizing
billing adjustments or other set-offs as a means of recovering from
royalty owners any such claimed refunds . . .
The Producers contend that the language of Section 7 of the Kansas
House Bill No. 2419 provides that the statute of limitations prevents
any recover of ad valorem tax refunds for the 1983-88 period which are
attributable to royalties. In addition, the Producers state that the
Bill prohibits producers from taking any action (through set-offs or
deductions from future royalties) to recover such refunds.
Each of the Producers requests that the Commission recognize that
passage of Kansas House Bill No. 2419 prohibits any ability of
producers to recover ad valorem tax reimbursements refunds from royalty
owners. It is stated that the Kansas Bill meets the test under Wylee
and a waiver is appropriate and necessary. In addition, the Producers
contend that they should not be required to expend further resources
and monies in seeking to recover payments which are not recoverable
under the Kansas law. The Producers argue that none of them should
continue to be at risk for such refunds.
Accordingly, they ask that the Commission expeditiously grant to
each named Producer a waiver of refunds as to royalties finding that,
based upon the Kansas House Bill No. 2419, such refunds are
collectible.
In the alternative, the Producers request that the Commission grant
a generic waiver of refunds attributable to royalties. It is stated
that such a generic ruling would avoid the duplication of expense and
administrative burdens of having the same issue considered on a case-
by-case basis.
If a waiver of royalty refunds is granted as requested, the
Producers request that any producer which has paid royalty refunds to
the pipeline is entitled to recovery of such amounts plus interest for
the period the pipeline (or its customers) held such monies.
Any person desiring to be heard or to make any protest with
reference to said motion should on or before June 22, 1998, file with
the Federal Energy Regulatory Commission, 888 First Street, N.W.
Washington, D.C. 20436, 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 or 385.211) and the Regulations under the
Natural Gas Act (18 CFR 157.10). 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. 98-14968 Filed 6-4-98; 8:45 am]
BILLING CODE 6717-01-M
