81 FR 94362 - Eagle Ford Midstream, LP; Notice of Staff Protest to Petition for Rate Approval

DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission

Federal Register Volume 81, Issue 247 (December 23, 2016)

[Federal Register Volume 81, Number 247 (Friday, December 23, 2016)]
[Notices]
[Pages 94362-94363]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-31001]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PR17-2-000]


Eagle Ford Midstream, LP; Notice of Staff Protest to Petition for 
Rate Approval

    1. Commission staff hereby protests, pursuant to section 
284.123(g)(4)(i) of the Commission's regulations, the Petition for Rate 
Approval filed by Eagle Ford Midstream, LP (Eagle Ford) on October 11, 
2016, in the above referenced docket. Pursuant to the Stipulation and 
Agreement approved by the Commission in Docket Nos. PR12-

[[Page 94363]]

3-000 and PR12-3-001, Eagle Ford filed a new petition for rate 
approval, pursuant to 18 CFR 284.123(b)(2), proposing a new rate 
applicable to its Natural Gas Policy Act (NGPA) section 311 service. 
Eagle Ford elected to use the Commission's optional notice procedures 
set forth in section 284.123(g) of the Commission's regulations. Eagle 
Ford proposes to increase its rates for firm, enhanced, and 
interruptible transportation services, authorized overrun service, and 
park and loan service. Eagle Ford also proposes to revise its Statement 
of Operating Conditions (SOC) applicable to its transportation services 
performed pursuant to NGPA section 311, which it states is updated 
solely to reflect the new proposed rates. Eagle Ford states it has not 
proposed any changes to the operating terms and conditions of its SOC.
    2. Commission staff notes that Eagle Ford has not adequately 
supported its filing and shown that the proposed rates are fair and 
equitable. Eagle Ford provided a series of summary schedules but did 
not provide supporting workpapers or any descriptive justification to 
support its petition for rate approval. For instance, Eagle Ford has 
not provided support for the discount adjustment used in calculating 
the billing determinants. In addition, Eagle Ford has not provided an 
explanation or support for its proposed cost of service and cost of 
capital, among other issues.
    3. Commission staff's specific concerns include Eagle Ford's 
development of its discount adjustment in designing rates. Eagle Ford 
requests a 47.3 percent overall discount adjustment to its billing 
units. However, Eagle Ford has not provided support for the actual 
calculations of the adjustments and the rationale for them.
    4. In addition, Eagle Ford requested a weighted average cost of 
capital of 10.34 percent. This figure appears to be based upon a 
hypothetical capital structure of 40 percent debt and 60 percent 
equity, a 5.23 percent cost of debt and 13.75 percent cost of equity. 
However, Eagle Ford has not provided support for either the proposed 
capital structure or the individual capital cost components.
    5. Furthermore, Eagle Ford requested a test year adjustment to 
operating and maintenance expenses without support for the amount of 
the adjustment or for the level base year expenses. Eagle Ford did not 
provide support for the inclusion of administrative and general 
expenses that were excluded in its prior case, in Docket No. PR12-3-
000. Similarly, Eagle Ford did not provide support or explanation of 
its fivefold increase in plant or the effect of such increase on its 
cost of service.
    6. Finally, Commission staff has concerns regarding certain 
provisions in Eagle Ford's SOC. For example, it is unclear how Eagle 
Ford bills Firm Transportation customers and how Eagle Ford allocates 
capacity for new Firm Transportation customers during periods of 
constraint.

    Dated: December 9, 2016.
Kimberly D. Bose,
Secretary.
[FR Doc. 2016-31001 Filed 12-22-16; 8:45 am]
 BILLING CODE 6717-01-P