El Paso Natural Gas Co., LLC v. Federal Energy Regulatory Commission, No. 15-1323 (D.C. Cir. 2020)Annotate this Case
In three consolidated petitions for review, petitioners challenged five FERC orders on two intertwined El Paso rate cases under the Natural Gas Act, the 2008 Rate Case and the 2011 Rate Case.
The DC Circuit denied the petitions for review, holding that FERC's removal of both the undistributed subsidiary earnings and the loan to El Paso's parent from the equity component of El Paso's capital structure was reasoned and supported by substantial evidence. The court also held that FERC's conclusion that El Paso had not demonstrated that its proposed rates would comply with the 1996 settlement was reasonable; FERC reasonably excluded the two compressor stations from El Paso's rate base; and FERC's approval of a zone-of-delivery rate design measured by contract-paths and its rejection of equilibration for lack of quantitative support were neither arbitrary nor contrary to law.