RECOVERY OF FERC ORDER 636 TRANSITION
COSTS—STATEMENT OF POLICY
§ 69.341. Recovery of transition costs.
(a) On April 8, 1992, the Federal Energy Regulatory Commission (FERC) issued its Final Rule in Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation Under Part 284 of the Commission’s Regulations (Docket No. RM91-11-000); and Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol (Docket No. RM87-34-065).
(b) FERC recognized that to implement the requirements of the new rules, the pipelines would likely incur certain costs. The costs to effectuate the restructuring have been generically referred to as ‘‘transition’’ costs.
(1) FERC Account 191 transition costs are costs which shall be considered as ‘‘natural gas’’ costs within the meaning of that term as used in 66 Pa.C.S. § 1307(f) (relating to sliding scale of rates; adjustments). Consequently, FERC Account 191 transition costs may be presented as a claim in the purchased gas cost proceedings of local gas distribution companies (LDCs) subject to the statutory and regulatory procedures applicable to gas cost rate proceedings, generally. See National Fuel Gas Distribution Corporation v. Pennsylvania Public Utility Commission, 137 Pa. Commw. 621, 587 A.2d 54 (1991).
(2) The Commission concludes that transition costs in the nature of Gas Supply Realignment Costs (GSR costs) are not natural gas costs for purposes of recovery under 66 Pa.C.S. § 1307(f).
(3) The Commission concludes that transition costs in the nature of ‘‘stranded costs’’ are not natural gas costs subject to recovery under 66 Pa.C.S. § 1307(f).
(4) The Commission concludes that costs related to new facilities to implement FERC restructuring brought about by FERC Order 636 may be natural gas costs subject to recovery through gas cost rate procedures.
(5) The Commission will permit LDCs the opportunity for the full recovery of transition costs in the nature of GSR costs and stranded costs through the filing of a tariff or tariff supplement under 66 Pa.C.S. § 1307(a) or § 1308 (relating to voluntary changes in rates). Each filing will be evaluated on a case-by-case basis.
Source The provisions of this § 69.341 adopted November 12, 1993, effective November 13, 1993, 23 Pa.B. 5405.
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