The Process of Negotiating Settlements at FERC
AbstractInterstate gas pipelines and their customers presently settle about 90% of the rate cases set for hearing before the Federal Energy Regulatory Commission (FERC). In recent years, the median time for negotiating settlements and having them approved is about 11 months, compared to several years to complete litigated hearings. This paper explores how this is achieved. FERC has a tight schedule for the hearing process. In contrast to other jurisdictions, FERC Trial Staff play an active role in facilitating negotiation and settlement. They propose a first settlement offer 3 months after a pipeline files for a tariff rate increase. An analysis of the 9 cases over the last two years where full and uncontested settlement was reached shows that discussions led by Trial Staff led to agreement in principle in a median time of 2 ½ months after this first offer, just before testimony would otherwise need to have been filed. It took a further 2 ½ months for the parties to finalise the wording of the settlement and to obtain the judge’s certification that it was uncontested, and 3 months for FERC formally to approve it. FERC’s settlement process has worked successfully and essentially unchanged for over 35 years. It suggests a more active role for the regulatory body than was previously apparent.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1116.
Date of creation: 31 Jan 2011
Date of revision:
Contact details of provider:
Web page: http://www.econ.cam.ac.uk/index.htm
Regulation; negotiated settlement;
Other versions of this item:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chermak, Janie M., 1998. "Order 636 and the U.S. natural gas industry," Resources Policy, Elsevier, vol. 24(4), pages 207-216, December.
- Doucet, Joseph & Littlechild, Stephen, 2009. "Negotiated settlements and the National Energy Board in Canada," Energy Policy, Elsevier, vol. 37(11), pages 4633-4644, November.
- Carol A. Dahl & Thomas K. Matson, 1997.
"Evolution of the U.S. Natural Gas Industry in Response to Changes in Transaction Costs,"
University of Wisconsin Press, vol. 73(3), pages 390-408.
- Carol A. Dahl & Thomas K. Matson, 1998. "Evolution of the U.S. Natural Gas Industry in Response to Changes in Transaction Costs," Land Economics, University of Wisconsin Press, vol. 74(3), pages 390-408.
- Doane, Michael J & Spulber, Daniel F, 1994. "Open Access and the Evolution of the U.S. Spot Market for Natural Gas," Journal of Law and Economics, University of Chicago Press, vol. 37(2), pages 477-517, October.
- De Vany, Arthur & David Walls, W., 1994. "Natural gas industry transformation, competitive institutions and the role of regulation : Lessons from open access in US natural gas markets," Energy Policy, Elsevier, vol. 22(9), pages 755-763, September.
- Littlechild, S., 2011. "Regulation, customer protection and customer engagement," Cambridge Working Papers in Economics 1142, Faculty of Economics, University of Cambridge.
- Littlechild, S., 2011.
"Merchant and Regulated Transmission: Theory, Evidence and Policy,"
Cambridge Working Papers in Economics
1160, Faculty of Economics, University of Cambridge.
- Stephen Littlechild, 2012. "Merchant and regulated transmission: theory, evidence and policy," Journal of Regulatory Economics, Springer, vol. 42(3), pages 308-335, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Howard Cobb).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.