[Federal Register Volume 63, Number 47 (Wednesday, March 11, 1998)]
[Notices]
[Pages 11881-11882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6239]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket No. SA98-8-000]


Ensign Oil & Gas Inc.; Notice of Petition for Adjustment and 
Dispute Resolution Request

March 5, 1998.
    Take notice that on March 2, 1998, Ensign Oil & Gas Inc. (Ensign), 
filed a petition for adjustment under section 502(c) of the Natural Gas 
Policy Act of 1978 (NGPA),\1\ and a dispute resolution request, with 
respect to its Kansas ad valorem tax refund liability under the 
Commission's September 10, 1997 Order in Docket Nos. RP97-369-000, 
GP97-4-000, and GP97-5-000.\2\
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    \1\ 15 U.S.C. Sec. 3142(c) (1982).
    \2\ See 80 FERC para. 61,264 (1997); order denying reh'g issued 
January 28 1998, 82 FERC para. 61,058 (1998).
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    The Commission's September 10 order on remand from the D.C. Circuit

[[Page 11882]]

Court of Appeals \3\ directed first sellers under the NGPA to make 
Kansas ad valorem tax refunds, with interest, for the period from 1983 
to 1988. The Commission issued a January 28, 1998 order in Docket No. 
RP98-39-001, et al. (January 28 Order),\4\ clarifying the refund 
procedures, stating that producers could request additional time to 
establish the uncollectability of royalty refunds, and that first 
seller may file requests for NGPA section 502(c) adjustment relief from 
the refund requirement and the timing and procedures for implementing 
the refunds, based on the individual circumstances applicable to each 
first seller.
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    \3\ Public Service Company of Colorado v. FERC, 91 F.3d 1478 
(D.C. 1996), cert. denied, Nos. 96-954 and 96/1230 (65 U.S.L.W. 3751 
and 3754, May 12, 1997).
    \4\ 82 FERC para. 61,059 (1998).
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    Ensign requests that the Commission resolve any potential dispute 
between Ensign and Williams Gas Pipelines Central, Inc., formerly: 
Williams Natural Gas Company (Williams), finding that Ensign has no 
liability for reimbursement of Kansas ad valorem taxes paid over the 
period 1983 to 1988, based on a 1990 Settlement Agreement between 
Ensign and Williams or, in the alternative (if the Commission decides 
that the Ensign-Williams settlement does not resolve the refund 
liability issues) that adjustment relief from such refund liability be 
granted to Ensign, based on Ensign's assertion that it would be 
inequitable and an unfair distribution of burdens for the Commission to 
require Ensign to make refunds when Ensign, in good faith, negotiated a 
settlement with Williams in 1990, under which Ensign gave up its claims 
against Williams in return for a release from all claims by Williams 
that were not excluded under the 1990 Settlement Agreement. Ensign 
further argues that it would be inequitable and an unfair distribution 
of burdens for the Commission to require Ensign to refund royalties 
with respect to its sales to Williams, since Amoco Production Company 
made all of the royalty disbursements and Ensign has no knowledge of 
who the royalty interest owners are. Ensign also asserts that relief is 
justified on equitable grounds, in view of the fact that Ensign 
previously relied on the Commission's orders that permitted first 
sellers to collect Kansas ad valorem tax reimbursements.
    In addition, Ensign requests procedural adjustment relief, pursuant 
to the January 28 Order, with respect to sales to Northern Natural Gas 
Company (Northern). Specifically, Ensign requests that it be allowed 
to:
    (1) Defer payment of principal and interest attributable to royalty 
refunds under these sales for one year until March 9, 1999;
    (2) Place into its escrow account the principal on its share of 
refunds allegedly due Northern [excluding royalties covered above in 1) 
above], pending a final determination whether there has been any 
violation of the maximum lawful prices under the NGPA;\5\ and
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    \5\ Ensign indicates that it will disburse the principal on 
recovered royalties to Northern Natural, if it has been determined 
that the price collected, plus the Kansas ad valorem tax 
reimbursement, exceed the maximum lawful price. Ensign also 
indicates that it will, at that time, place the interest on 
recovered royalties in its escrow account, and will file with the 
Commission for relief from unrecovered or de minimus royalties 
(principal and interest).
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    (3) Place into its escrow account the interest on the total amount 
of refunds allegedly due Northern [excluding royalties deferred under 
1) above], pending resolution of the maximum lawful price issue 
discussed in 2) above and pending final judicial action on review of 
the Commission's orders establishing the interest obligation.
    Ensign states that it is committed to resolve the maximum lawful 
price issue or present it to the Commission on or before September 6, 
1998.
    Any person desiring to be heard or to make any protest with 
reference to said petition should on or before 15 days after the date 
of publication in the Federal Register of this notice, file with the 
Federal Energy Regulatory Commission, Washington, D.C. 20426, a motion 
to intervene or a protest in accordance with the requirements of the 
Commission's Rules of Practice and Procedure (18 CFR 384.214, 385.211, 
385.1105, and 385.1106). All protests filed with the Commission will be 
considered by it in determining the appropriate action to be taken but 
will not serve to make the protestants parties to the proceeding. Any 
person wishing to become a party to a proceeding or to participate as a 
party in any hearing therein must file a motion to intervene in 
accordance with the Commission's Rules.
David P. Boergers,
Acting Secretary.
[FR Doc. 98-6239 Filed 3-10-98; 8:45 am]
BILLING CODE 6717-01-M