[Federal Register Volume 62, Number 111 (Tuesday, June 10, 1997)]
[Notices]
[Pages 31587-31588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15047]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket No. RP97-373-000]


Koch Gateway Pipeline Company; Notice of Proposed Changes in FERC 
Gas Tariff

June 4, 1997.
    Take notice that on May 30, 1997, Koch Gateway Pipeline Company 
tendered for filing as part of its FERC Gas Tariff, Fifth Revised 
Volume No. 1, the tariff sheets listed on the filing, to become 
effective December 1, 1997.
    Koch states that the proposed changes would increase revenues from 
jurisdictional service by $81 million based on the 12-month period 
ending January 31, 1997, as adjusted.
    Koch states that this filing proposes changes to the rates for Koch 
Gateway's transportation and gathering rates to reflect cost increases, 
and the change in rate design to a zone gate method comprised of four 
zones for pricing its transportation services. Koch further states that 
the filing fulfills its commitment under Section VII of the Joint 
Stipulation and Agreement dated February 10, 1995, approved in Docket 
No. RP94-120, and it addresses a significant undercollection of Koch's 
current settled cost-of-service.
    Koch Gateway proposes an effective date of July 1, 1997, for the 
applicable tariff sheets, anticipating that the Commission will 
exercise its authority under Section 4(e) of the NGA to suspend the 
effectiveness of the sheets for the full five-month statutory period, 
so the applicable sheets are allowed to become effective December 1, 
1997.
    Koch seeks to increase the cost-of-service used to derive its 
maximum tariff rates by $81 million over its settled cost-of-service 
level established in Docket No. RP94-120 and by $48 million over the 
cost-of-service which Koch originally filed for in Docket No. RP94-120. 
As part of the enhancements to Koch's system included in this increase, 
Koch has reduced its fuel rate from 2.0% to 1.6%, while Koch's 
customers will benefit from new assets, including installation of new 
information systems.
    Koch seeks to roll-in the costs of its Bastian Bay supply lateral, 
with these facilities costs paid by customers utilizing this zone. Koch 
proposes inclusion of a negative salvage provision for onshore 
transmission facilities, allowing for recovery of future abandonment 
costs. All other depreciation rates remain the same, however, annual 
depreciation expense increased by $23 million over the depreciation 
expenses included in the currently effective rates from Docket No. 
RP94-120.
    Koch proposes a hypothetical capital structure in its filing, and 
that it be granted 58% equity and 42% debt upon which to base its 
return. Koch seeks an overall rate of return on equity of 17.7%. The 
rate of return in the currently effective rates is 14.16% pretax. The 
return and income taxes included in this filing are $82 million, an 
increase from its previous rates.
    Koch proposes change in its rate design from six 100-mile types to 
a zone gate method. It has divided its system into four geographic 
zones and provided for a system access charge in addition to a zone 
component for each zone theoretically utilized to provide 
transportation service. The zone rate structure will only apply to 
Koch's firm and interruptible transportation services. No-Notice 
service rates, including the small customer option, will continue under 
average postage stamp rates based upon seasonal MDQs.
    Koch states that the proposed rate increase is the result of 
increases in Koch's cost-of-service, its rate base, and the utilization 
of a discount adjustment to throughput for the purpose of designing 
rates. No change from SFV rate design methodology, nor in the 
functionalization or classification of assets or expenses is proposed. 
Interruptible transportation service remains on a 100% load factor 
design basis and Koch maintains its 33.3% load factor to impute volumes 
for small customer option services. The proposed rates will not affect 
Koch's NNS-SCO, FTS, FTS-SCO or ITS customers which are currently 
capped by previously negotiated discounted transportation agreements.
    Koch states that the tariff sheet changes propose to eliminate ITS 
revenue crediting, propose zones for calculation of transportation 
rates, and other minor changes.
    Any person desiring to be heard or to protest this filing should 
file a motion to intervene or protest with the Federal Energy 
Regulatory Commission, 888 First Street N.E., Washington, D.C. 20426, 
in accordance with Sections 385.214 and 385.211 of the Commission's 
rules and regulations. All such motions or protests must be filed in 
accordance with Section 154.210 of the Commission's Regulations. 
Protests will be considered by the commission in determining the 
appropriate action to be taken, but will not serve to make protestants 
parties to the proceeding.
    Any person wishing to become a party must file a motion to 
intervene. Copies

[[Page 31588]]

of this filing are on file with the Commission and are available for 
public inspection in the Public Reference Room.
Lois D. Cashell,
Secretary.
[FR Doc. 97-15047 Filed 6-9-97; 8:45 am]
BILLING CODE 6717-01-M