State Rate Election Standards

Commission regulations (§ 2:84.123(b)(1)) provides that pipelines may propose to

• base proposed rates upon the methodology used at the state level for the same service:
   
  • § 284.123(b)(1)(i)(A) - In designing rates to recover the cost of gathering, treatment, processing, transportation, delivery or similar service (including storage service) included in one of its then effective firm sales rate schedules for city-gate service on file with the appropriate state regulatory agency; or
     
  • § 284.123(b)(1)(i)(B) - In determining the allowance permitted by the appropriate state regulatory agency to be included in a natural gas distributor's rates for city-gate natural gas service; or
     
  • § 284.123(b)(1)(ii) - To use the rates contained in one of its then effective transportation rate schedules for intrastate service on file with the appropriate state regulatory agency which the intrastate pipeline determines covers service comparable to service under this Subpart.
     

The regulations further state:

• These rates are presumed to be fair and equitable (§ 284.123(d)(1), and
  
  Must not be in excess of rates and charges which interstate pipelines would be permitted to charge for providing similar transportation service (§ 284.123(d)(2)).
   

Expected Supporting Documentation

1. Support that the elected state rate is cost-based, generally applicable, on file with the appropriate state regulatory agency, currently effective with gas flowing, and appropriate for section 311 interstate service.
2. Copy of the then effective state rate schedule or link to the state rate schedule on the state regulatory agency or company website.
3. Copy of the state rate filing that shows the cost of service, rate design and permitted allowances or link to the state rate filing on the state regulatory agency website.
4. Copy of state agency’s order approving the state rate schedule and rate.
5. Workpapers, in electronic spreadsheet format with formulas enabled, showing the derivation of the proposed interstate rate if that rate is based on, but not the same as, the state rate.
6. Description of the pipeline’s facilities, services and any changes that have occurred since it last rate filing.
7. Demonstration that the proposed rates are not in excess of those which interstate pipelines would be permitted to charge for providing similar transportation service.
8. Identify any proposed changes to rate and non-rate provisions of the Statements of Operating Conditions (SOC), preferably in red-line strike-out.
9. Rates go into effect the later of 30-days prior to the date of filing or the proposed effective date, subject to refund, until final.

Note: a Hinshaw Pipeline may fulfill its five year rate review filing requirement by providing cost and throughput data in the form specified in §154.313, if the company is not filing rates pursuant to 284.123(b)(1) or (b)(2).