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09 November, 2018

Cost of Service Rates: First Impressions Matter - What's Next for FERC's MLP Income Tax Policy

The Takeaway:

The Federal Energy Regulatory Commission (FERC) process to reduce natural gas pipeline cost of service rates began in earnest this quarter with the first and second waves of filings already before the Commission. We now have enough data to make some predictions about the outcome of the process for cost of service rates broadly, and we can see how companies appear to be managing the impact to rates. Additionally, we are closely monitoring the paper hearing on Tallgrass Energy's (TGE) Trailblazer rate case—an “issue of first impression” for FERC following the United Airlines ruling—for insight on what FERC’s ultimate precedent on tax allowance for mixed-ownership pipelines may look like.