Gas pipeline operator faces pricing probe
- Article by: DAVID SHAFFER
- Star Tribune
- November 15, 2012 - 10:05 PM
Federal regulators on Thursday launched an investigation of alleged overpricing on a Minnesota-Wisconsin pipeline that supplies natural gas to major utilities in the Twin Cities.
The target of the investigation is Viking Gas Transmission Co., a unit of Tulsa-based ONEOK Partners, and operator of a 670-mile natural gas pipeline running from Canada, through Minnesota and into Wisconsin. Xcel Energy Inc. and CenterPoint Energy partly rely on it to supply Minnesota customers.
The Federal Energy Regulatory Commission, which regulates interstate pipelines, said its investigation will determine whether Viking charged "unjust and unreasonable" rates. The commission also launched a similar investigation against a Wyoming pipeline operator on Thursday.
Viking's parent company said in a statement that it works to comply with federal rules, operates under rates approved in 2002 and would cooperate fully with the inquiry.
In its order for an investigation, the commission estimated that Viking earned more than 21 percent on equity in 2010 and 2011, a rate regulators alleged was excessive. The company has 75 days to respond with a study of its costs and revenue.
Xcel Energy, which serves 440,000 natural gas customers in Minnesota, said it gets about 10 to 15 percent of its gas from Viking's pipeline. CenterPoint Energy, which has 800,000 Minnesota customers, said it gets 10 to 20 percent.
Both utilities said they intend to track the regulatory case and take steps to assure customers' interests are represented. If regulators determine that Viking's rates are excessive, retail customers could benefit from a future reduction, but this kind of regulatory proceeding doesn't result in retroactive refunds, Tim Carter, Xcel's director of gas supply, said in an e-mail.
Any reduction would be passed on to customers through the fuel adjustment on their bills.
Since 2008, federal regulators have investigated two to three pipeline operators annually for alleged overcharges. That's when federal rules were changed to require more detailed financial reporting by interstate pipelines, said commission spokesman Craig Cano. Some cases resulted in settlements, including investigations launched in 2009 of two other operators with pipelines in Minnesota.
David Shaffer 612-673-7090 @ShafferStrib
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