[Federal Register Volume 63, Number 54 (Friday, March 20, 1998)]
[Notices]
[Page 13648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7264]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket No. SA98-11-000]


Mull Drilling Company, Inc.; Notice of Petition for Adjustment

March 16, 1998.
    Take notice that on March 5, 1998, Mull Drilling Company, Inc. 
(MDC), filed a petition for adjustment under section 502(c) of the 
Natural Gas Policy Act of 1978 (NGPA) [15 U.S.C. 3142(c) (1982)], 
requesting an order from the Commission determining: (1) that a 
Termination Agreement between MDC and Williams Gas Pipelines Central, 
Inc., formerly: Williams Natural Gas Company, (Williams) absolves MDC 
of its liability to make Kansas ad valorem tax refunds under those 
terminated contracts; (2) that MDC is only responsible for Kansas ad 
valorem tax refund amounts attributable to its working interest; (3) 
that the payment of Kansas ad valorem tax refunds will create a special 
hardship for MDC and, therefore, that MDC should be permitted to 
amortize its refunds over a reasonable period of time; and (4) that 
MDC's liability for Kansas ad valorem tax refunds attributable to the 
Clarke and Zundle leases should be waived, on the basis that MDC can no 
longer recoup any refunds from the owners of those leases.\1\ Absent 
adjustment relief, the Kansas ad valorem tax refunds are required by 
the Commission's September 10, 1997 order in Docket No. RP97-369-000 et 
al.\2\ MDC's petition is on file with the Commission and open to public 
inspection.
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    \1\ MDC states that the Clarke and Zundle leases were each 
dedicated to a Williams contract, and that the leases were sold to a 
third party some years ago. In view of this, MDC asserts that it has 
no ability to recoup refunds from future production of these two 
leases.
    \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 
Court of Appeals \3\ directed first sellers to make Kansas ad valorem 
tax refunds, with interest, for the period from 1983 to 1988. That 
order also provided that first sellers could, with the Commission's 
prior approval, amortize their Kansas ad valorem tax refunds over a 5-
year period, although interest would continue to accrue on any 
outstanding balance.
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    \3\ Public Service Company of Colorado versus, 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) (Public Service).
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    MDC states that it was a party to certain gas purchase contracts 
entered into with Cities Service Gas Company (Williams' predecessor in 
interest). MDC explains that, as the operator, of the leases dedicated 
under those contracts, MDC acted on behalf of itself and, in some 
cases, third-party working interest owners. MDC adds that it passed 
along the funds, including the Kansas ad valorem tax reimbursement 
funds, to the other working interest owners, and only retained those 
funds attributable to its own working interest. In addition, MDC states 
that all but two of the contracts with Williams were terminated on 
March 31, 1993, and that the Termination Agreement with Williams 
contained broad release and indemnity provisions under which the 
parties agreed that all existing claims on the effective date of the 
Termination Agreement, arising from the rights and obligations under 
the subject contracts, would be forever ``released and discharged.''
    MDC asserts that, because Williams did not exclude the Kansas ad 
valorem tax refund liability from the terms of the Termination 
Agreement, MDC should not owe any refunds to Williams for the Kansas ad 
valorem tax reimbursements that Williams made (to MDC) under those 
contracts.\4\
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    \4\ MDC's adjustment petition identifies its Williams contracts 
and the leases under those contracts, but does not specify which two 
contracts were not covered by the 1993 Termination Agreement.
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    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. 98-7264 Filed 3-19-98; 8:45 am]
BILLING CODE 6717-01-M