Who’s the Boss? DC Circuit Says CEQ Can’t Call the Shots
The D.C. Circuit has ruled that the CEQ lacks authority to issue binding NEPA implementation regs, challenging decades of environmental review practice.
Rate Cases Redux: A New Section 5 and GTN XPress Litigation
Originally published for customers November 6, 2024.
FERC’s investigation into Vector Pipeline’s rates reveals significant over-recovery, with returns on equity exceeding 40% in recent years, and requires a detailed cost and revenue study. Meanwhile, the GTN XPress litigation raises key issues in the Fifth Circuit, including disputes over rolled-in rates, NEPA compliance, and market need analysis—highlighting potential shifts in regulatory and judicial precedents. With ongoing settlement proceedings and upcoming rate case deadlines, the outcomes could have a lasting impact on industry dynamics and strategy.
What’s the issue?
As Halloween approaches, it’s only appropriate to highlight a fear most pipelines share, Section 5 rate investigations like the one just initiated into Vector Pipeline L.P.’s (Vector) rates. Meanwhile, moratoria and comeback dates are approaching for some pipelines, while others are in settlement negotiations, and initial briefs have been filed in the consolidated GTN XPress litigation.
Why does it matter?
Rate modifications are important signals for potential revenue changes, and how the Commission handles them can impact tariff adjustment negotiations and industry dynamics. Rates litigation provides critical precedential value to inform risk assessments, particularly when consolidated with environmental and market needs challenges as in the GTN XPress litigation.
What’s our view?
Vector looks to be substantially over-recovering based on its estimated return on equity. How the Fifth Circuit approaches the issues in the GTN XPress case regarding rolled-in rates, market need, and NEPA will be instructive with regard to differences in venue and potential developing splits, and FERC’s reply brief could demonstrate any evolution in its analysis.
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