In Viking’s case, FERC stated that the company’s current rates were established as part of a FERC-approved settlement on November 8, 2002, and that the settlement did not require Viking to file a new rate case at any time in the future. Viking has not filed a general NGA section 4 rate case in the 10 years since the 2002 settlement. Having reviewed Viking’s cost and revenue information for the years 2010 and 2011, FERC estimates that the company’s return on equity for those calendar years is 21.39 percent and 21.75 percent, respectively. This concern precipitated the investigation and the need for a hearing to determine whether Viking’s level of earnings is substantially in excess of actual cost of service, including a reasonable return on equity.
Interestingly, none of the Section 5 rate investigations instituted by FERC since November, 2009 has proceeded to a full evidentiary hearing and decision. Rather, all have resulted in case-specific uncontested settlements approved by FERC, with the exception of one case (MIGC LLC) that was terminated by the Presiding Judge based on changed circumstances raised on motion by FERC Trial Staff. It is too early to tell how the Viking and WIC cases will evolve.