Kinder Morgan's Wyoming Interstate Monday proposed a settlement agreement that would cut rates on its natural gas pipeline system and end the US Federal Energy Regulatory Commission's investigation into its rates.
The deal would phase in lower rates on July 1 and on January 1, 2014, and bar rate changes through July 1, 2016.
If FERC approves the settlement, it will end the commission's investigation under Section 5 of the Natural Gas Act to determine if the pipeline is overcharging its customers.
When the probe was launched in November, staff estimated that Wyoming Interstate's return on equity was 19.55% for 2010 and 18.51% for 2011.
Wyoming Interstate has about 800 miles of pipeline that carries gas from production basins in Wyoming, Utah and Colorado.
In addition to lowering rates on the system, the settlement also would roll the costs of the Echo Springs Lateral into the costs of Wyoming Interstate's mainline service, starting February 1, 2015.
Wyoming Interstate will file a cost and revenue study with FERC on or before July 3, 2018, if it has not filed a rate case and the commission has not launched a new rate investigation by that time, the settlement said.
The deal allows Wyoming Interstate to file a limited rate case for the costs of lost and unaccounted for gas, annual charge adjustments, conversion of business systems, compliance with FERC rules and new or expanded services.
The pipeline also can accrue the costs of complying with new rules or laws related to greenhouse gases, clean air, and pipeline safety and then file to recover those costs after July 1, 2016, according to the settlement.
