NPGA-led Coalition Protests Enterprise TEPPCO Rate Increase for Second Time

On April 2, 2012, NPGA and a coalition of 84 other companies and state associations joined together to protest the huge rate increase proposed by Enterprise TEPPCO. This represents a 26% increase in the number of participating companies over the protest filed on Enterprise TEPPCO's first rate increase proposal, which was rejected out-of-hand by FERC on March 2, 2012. In fact, this protest was joined by virtually every state association through which the Enterprise TEPPCO pipeline runs.

According to the protest, "Enterprise TEPPCO's Tariff Filing constitutes a massive increase in rates ranging generally from 50% to over 100% on origin-destination combinations associated with the transport of NGLs (primarily propane and butane) and on three origin-destination combinations associated with the transport of refined products." Furthermore, "Enterprise TEPPCO is attempting to increase its revenue from collected rates by approximately $98 million with total projected revenues of approximately $349 million. This tremendous revenue increase is to be born primarily by the movements of NGLs and the three refined products destinations that do not have market-based rates and will negatively impact the propane industry and its customers as well as some refined product shippers...."

The protest is supported by economic analysis performed by experts in pipeline system accounting: "There is evidence that Enterprise TEPPCO has overstated its cost of service and likely understated its revenue such that the proposed increases are not reasonable and the alleged substantial divergence between...costs and revenues may be vastly misrepresented."

Another very important area of challenge in the protest relates to the treatment of costs associated with terminalling and storage facilities. "During the first quarter 2010 [Enterprise TEPPCO] conveyed terminalling and storage assets totaling $634.7 million partially to its wholly-owned affiliate and partially to an independent affiliate." Then, "On April 1, 2010, [Enterprise TEPPCO] further conveyed its investment in its terminally and storage facilities to an affiliate not directly owned by [Enterprise TEPPCO]." Yet, "According to Enterprise TEPPCO, the storage assets are still being used as part of Enterprise TEPPCO's FERC-jurisdictional service and the assets are being leased by Enterprise TEPPCO from an unregulated affiliate." NPGA's protest raises this and whether shippers are being improperly charged a higher rate for jurisdictional storage costs as a result of Enterprise TEPPCO's transfer of these assets out of the pipeline.

NPGA wishes to thank all companies that joined either of the protests against these unjust and unreasonable rate increases on Enterprise TEPPCO. We hope that FERC will be convinced by this outpouring of concern to reject once again the pipeline's proposal, or at a minimum to delay it for the maximum amount of time possible under the law to give the Commission time for a hearing and full investigation.


 



 

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