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The process of negotiating settlements at FERC

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  • Littlechild, Stephen

Abstract

Interstate gas pipelines and their customers presently settle about 90% of the rate cases set for hearing before the Federal Energy Regulatory Commission (FERC). The conventional regulatory litigation process is now only an occasional means of dispute resolution. This paper explains the settlement process, illustrating with the 12 section 4 rate cases brought by pipelines from 2008 and 2009. The paper also discusses and illustrates why parties prefer settlement to litigation, what difference it makes, which cases tend to settle, what might account for the increasing frequency of settlements over time, the recent phenomenon of pre-filing settlements and the recent settlement of section 5 cases brought by FERC. In contrast to many other regulatory jurisdictions, FERC Trial Staff play an active role in facilitating negotiation and settlement. They make an initial analysis 3 months after a pipeline files for a tariff rate increase. Thereafter, the regulatory aim is to bring the parties into agreement, not to determine an outcome and impose it upon them. This is a different role for the regulatory body than was previously apparent.

Suggested Citation

  • Littlechild, Stephen, 2012. "The process of negotiating settlements at FERC," Energy Policy, Elsevier, vol. 50(C), pages 174-191.
  • Handle: RePEc:eee:enepol:v:50:y:2012:i:c:p:174-191
    DOI: 10.1016/j.enpol.2012.06.022
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Federico Boffa & Viswanath Pingali & Francesca Sala, 2015. "Strategic investment in merchant transmission: the impact of capacity utilization rules," Working Papers 2015/12, Institut d'Economia de Barcelona (IEB).
    2. Littlechild, Stephen C., 2012. "Australian airport regulation: Exploring the frontier," Journal of Air Transport Management, Elsevier, vol. 21(C), pages 50-62.
    3. Stephen Littlechild, 2012. "Merchant and regulated transmission: theory, evidence and policy," Journal of Regulatory Economics, Springer, vol. 42(3), pages 308-335, December.
    4. Littlechild, S., 2011. "Regulation, customer protection and customer engagement," Cambridge Working Papers in Economics 1142, Faculty of Economics, University of Cambridge.
    5. Boffa, Federico & Pingali, Viswanath & Sala, Francesca, 2015. "Strategic investment in merchant transmission: The impact of capacity utilization rules," Energy Policy, Elsevier, vol. 85(C), pages 455-463.
    6. Bordignon, Stephen & Littlechild, Stephen, 2012. "The Hunter Valley access undertaking: Elements of a negotiated settlement," Transport Policy, Elsevier, vol. 24(C), pages 179-187.
    7. Chakravorty, Shourjo, 2015. "A study of the negotiated-settlement practice in regulation: Some evidence from Florida," Utilities Policy, Elsevier, vol. 32(C), pages 12-18.
    8. Stern, Jon, 2014. "The British utility regulation model: Its recent history and future prospects," Utilities Policy, Elsevier, vol. 31(C), pages 162-172.
    9. George Briden & Jonathan Lesser, 2017. "Regulatory arbitrage and the FERC rate settlement process," Journal of Regulatory Economics, Springer, vol. 51(2), pages 184-196, April.
    10. Littlechild, Stephen C., 2012. "German airport regulation: Framework agreements, civil law and the EU Directive," Journal of Air Transport Management, Elsevier, vol. 21(C), pages 63-75.

    More about this item

    Keywords

    Regulation; Negotiated settlement; Energy;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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