[Federal Register Volume 64, Number 77 (Thursday, April 22, 1999)]
[Notices]
[Pages 19755-19756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10035]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket Nos. SA99-17-000, SA99-18-000, SA99-19-000, SA99-20-000. SA99-
21-000 (Not Consolidated)]


Chevron U.S.A. Inc.; Notice of Petitions for Dispute Resolution 
or, Alternative, for Adjustment

April 16, 1999.
    Take notice that Chevron U.S.A. Inc. (Chevron) filed the above-
referenced petitions, requesting the Commission to resolve disputes 
concerning this Kansas ad valorem tax refund obligation to the 
pipelines listed below.

------------------------------------------------------------------------
             Pipeline                   Docket No.        Refund claim
------------------------------------------------------------------------
ANR Pipeline Company..............    \1\ SA99-17-000         $23,260.20
Northern Natural Gas Company......    \2\ SA99-18-000         494,814.97
Panhandle Eastern Pipe Line           \3\ SA99-19-000           7,403.85
 Company..........................
Colorado Interstate Gas Company...    \4\ SA99-20-000         418,116.56
Williams Gas Pipelines Central,       \5\ SA99-21-000         840,470.72
 Inc..............................
------------------------------------------------------------------------
\1\ Changed from GP99-2-000, filed March 9, 1999.
\2\ Changed from GP99-3-000, filed March 11, 1999.
\3\ Changed from GP99-4-000, filed March 9, 1999.
\4\ Changed from GP99-5-000, filed March 10, 1999.
\5\ Changed from GP99-6-000, filed March 10, 1999.

    Chevon requests that the Commission resolve its dispute with the 
pipelines by holding that settlements and/or release agreements 
resolved all issues, including those associated with Kansas ad valorem 
tax refund liabilities, between the parties. Chevron contends that by 
agreeing in the settlement to forego claims it for nonperformance it 
otherwise could have continued to pursue, Chevron agreed to accept 
total payments under the contracts that did not exceed the MLP ceilings 
multiplied by the total volumes represented by each pipeline's 
nonperformance. In such circumstances, no refund should be required. To 
order otherwise would prevent Chevron from receiving the very benefits 
it bargained for in the settlements-settlements that the Commission 
itself strongly encouraged as a means to resolve the massive take-or-
pay and underpayments liabilities of interstate pipelines and make the 
transition to a more market-responsive and competitive environment.
    Chevron maintains that the pipelines and consumers benefitted from 
agreements and settlements because the settlements allowed the 
pipelines to avoid the much higher costs that full-performance of the 
contract would have entailed. By resolving ``all claims'' relating to, 
inter alia, ``contractual price'', the settlements resolved the Kansas 
ad valorem tax reimbursement issue. The Commission has found that these 
settlements served the public interest.
    Chevron also requests the Commission to establish procedures to 
verify the refund calculations in all dockets to ensure fairness and 
equity. Alternatively, Chevron requests that the Commission waive 
Chevron's refund liability pursuant to Section 501(c) of the NGPA. 
Chevron asserts that the Commission has equitable discretion to grant 
adjustment relief from this refund requirement. Since the tax 
reimbursement payments made by the pipelines were for taxes that 
Chevron in fact paid the State of Kansas, Chevron maintains it did not 
retain any revenues in excess of the MLPs. Chevron maintains that the 
equities in the case require the Commission to waive Chevron's refund 
obligation. At a minimum, Chevron continues the Commission should waive 
the royalty portion of the refund. Chevron notes that it sold its 
Kansas properties since 1988, and thus no longer has ongoing 
contractual relationships with its former Kansas royalty owners. The 
response from Chevron's former royalty owners to Chevron's mailing has 
been negligible. To engage in extensive searches or to pursue legal 
action against these interests would be a cost-prohibitive exercise in 
futility. Since Chevron has transferred or otherwise ended the leases 
in question here, and thus has no ongoing relationship with the royalty 
owners, let alone relationships that would permit Chevron to impose a 
unilateral reduction in future royalty payments as contemplated in 
Wylee. Chevron asserts that the royalty portion of the refund claim is 
uncollectible, as a practical matter, due to the passage of time and 
the Kansas statute of limitations. Chevron's petitions are on file with 
the Commission, and they are open to public inspection. This filing may 
be viewed on the web at http://www.ferc.fed.us/online/rims.htm (call 
202-208-2222 for assistance).
    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, 888 First Street, NE, Washington, 
DC 20426, a motion to intervene or a protest in accordance with the 
requirements of the Commission's Rules of Practice and Procedure (18 
CFR 385.214, 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

[[Page 19756]]

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.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 99-10035 Filed 4-21-99; 8:45 am]
BILLING CODE 6717-01-M