On Jan. 12, the Federal Energy Regulatory Commission (FERC) issued data requests to four interstate pipelines that are proposing incremental recourse rates in pending Natural Gas Act (NGA) Section 7 certificate applications.1 This action was significant because it appears to be FERC’s first step toward responding to tax law changes in the Law to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, also known as the Tax Cuts and Jobs Act of 2017 (2017 Tax Act).
FERC permits pipelines and public utilities to recover their actual or potential tax expenses in their regulated rates. The 2017 Tax Act reduces the corporate tax rate to 21 percent and allows certain investments to receive bonus depreciation treatment. FERC asked each pipeline to 1) explain how the 2017 Tax Act impacts its proposed project cost of service and the resulting initial recourse rate proposal; 2) provide an adjusted cost of service and recalculated initial incremental recourse rates; and 3) provide all supporting work papers and formulas.2 (more…)
On Wednesday March 30, 2017, the North American Energy Standards Board (“NAESB”) Wholesale Gas Quadrant (“WGQ”) Contracts Subcommittee voted to move forward with the development of a Mexican Addendum to the NAESB Base Contract for the Purchase and Sale of Natural Gas. Developing a Mexican Addendum should make Mexico a more desirable market for natural gas trading by providing greater certainty about the legal structure of gas trades.
As part of the 2017 NAESB WGQ Annual Plan, the WGQ Executive Committee proposed, and the Board approved, a proposal to review whether to develop a Mexican Addendum. In December 2016, WGQ members voted not to pursue a Mexican Addendum. However, that meeting was not well-attended and several parties who had advocated for creating a Mexican Addendum were not present.
On Wednesday, January 11, 2017, outbound Secretary of Energy Ernest Moniz spoke at the National Press Club in Washington, D.C., in what he said was his final major speaking appearance in the capital city. Secretary Moniz emphasized the importance of the U.S. Department of Energy National Laboratories and Technology Centers, and the many research and development accomplishes of the Obama administration, of which he was a part for nearly the last four years.
On Monday, November 14, 2016, Sidley Austin LLP Partner Ken Irvin discussed planning and coordinating international gas pipelines and infrastructure at this year’s annual Platts Mexican Energy Conference in Mexico City, Mexico. Ken was joined by Javier Gutierrez, Subdirector, Modernization and New Areas of Opportunity with Mexico’s state-owned electric utility Comisión Federal de Electricidad (“CFE”). (more…)