Williams filed a comprehensive stipulation and agreement on Jan. 2 with the Federal Energy Regulatory Commission (FERC), which the Tulsa, Okla.-based company said will settle all aspects of the Transcontinental Gas Pipe Line Co. LLC (Transco) rate case currently pending before the FERC.
“Overall, we are pleased with the outcome of the settlement and very appreciative of our customers’ interactions throughout the process,” Micheal Dunn, executive vice president and COO of Williams, said in a statement. “The settlement provides a fair return to Transco on its base service and also provides value to shippers, as evidenced by the recent remarketing of available Transco capacity that resulted in a new 82-year commitment with the successful shipper.”
The Transco pipeline delivers natural gas through a 10,000-mile interstate transmission pipeline system extending from South Texas to New York City. The pipeline system is a major provider of natural gas to northeastern and southeastern states, transporting about 15% of the nation’s natural gas, according to Williams’ website.
The Transco rate case was initiated in August 2018 to comply with a filing obligation under a prior settlement and to recover costs associated with increased capex and operations and maintenance expenses.
Williams said the settlement filed Jan. 2 provides rate certainty for customers while allowing Transco to recover its costs, safely and reliably operate its infrastructure, and expand to meet the needs of its customers.
As part of the settlement, Transco and the interveners agreed to a comprehensive “black box” resolution for the cost of service, rate design, cost classification and allocation to achieve an acceptable outcome for all parties. Under the settlement terms, Transco and the parties have agreed to a rate moratorium through Aug. 31, 2021. In addition, Transco has agreed to file a new rate case no later than Aug. 30, 2024.
While the settlement includes a 12.5% ROE for cost-based recourse rates offered on future infrastructure expansions projects, the settlement does not impact Transco’s existing negotiated rate contracts, which make up 51% of 2019 revenue, or Transco’s ability to offer negotiated rate contracts for future infrastructure expansion projects that can exceed 12.5% return on equity, according to the company press release.
Including revenue impacts and other related accounting entries, Williams expects about $76 million favorable impact to EBITDA in 2020 vs. 2018 (the last full year with no rate case effect), which was included in 2020 guidance provided at Williams’ analyst day on Dec. 5.
Williams anticipates FERC approval of the Transco settlement during second-quarter 2020, the company release said.
Libya's internationally recognized prime minister Fayez al-Serraj has warned of catastrophe if the week-long blockade, which has cut oil output to almost zero, is not lifted.
Annova LNG signed a precedent agreement with Valley Crossing Pipeline LLC (VCP) on Jan. 22, providing transportation for Annova LNG’s total natural gas requirements at its 6.5 mtpa LNG facility in Brownsville, Texas.
Saudi Arabia's Minister of Energy said all options are open at an OPEC+ meeting in early March, including further cuts in oil production