The Process of Negotiating Settlements at FERC
Interstate 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.
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.:
- Herbert, John H & Kreil, Erik, 1996. "US natural gas markets : How efficient are they?," Energy Policy, Elsevier, vol. 24(1), pages 1-5, January.
- Doucet, Joseph & Littlechild, Stephen, 2006. "Negotiated settlements: The development of legal and economic thinking," Utilities Policy, Elsevier, vol. 14(4), pages 266-277, December.
- Zhongmin Wang, 2004. "Settling Utility Rate Cases: An Alternative Ratemaking Procedure," Journal of Regulatory Economics, Springer, vol. 26(2), pages 141-163, 09.
- Thomas C. Gorak & Dennis J. Ray, 1995. "Efficiency and Equity in the Transition to a New Natural Gas Market," Land Economics, University of Wisconsin Press, vol. 71(3), pages 368-385.
- Chermak, Janie M., 1998. "Order 636 and the U.S. natural gas industry," Resources Policy, Elsevier, vol. 24(4), pages 207-216, December.
- 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.
- P. Joskow, 1974.
"Inflation and Environmental Concern: Structural Change in the Process of Public Utility Price Regulation,"
128, Massachusetts Institute of Technology (MIT), Department of Economics.
- Joskow, Paul L, 1974. "Inflation and Environmental Concern: Structural Change in the Process of Public Utility Price Regulation," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 291-327, October.
- 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.
- Bordignon, S. & Littlechild, S., 2012.
"The Hunter Valley Access Undertaking: elements of a negotiated settlement,"
Cambridge Working Papers in Economics
1218, Faculty of Economics, University of Cambridge.
- Bordignon, Stephen & Littlechild, Stephen, 2012. "The Hunter Valley access undertaking: Elements of a negotiated settlement," Transport Policy, Elsevier, vol. 24(C), pages 179-187.
- Littlechild, Stephen, 2009. "The bird in hand: Stipulated settlements in the Florida electricity sector," Utilities Policy, Elsevier, vol. 17(3-4), pages 276-287, September.
- Doucet, J. & Littlechild, S., 2006. "Negotiated Settlements: The development of economic and legal thinking," Cambridge Working Papers in Economics 0622, Faculty of Economics, University of Cambridge.
- Doucet, Joseph & Littlechild, Stephen, 2009. "Negotiated settlements and the National Energy Board in Canada," Energy Policy, Elsevier, vol. 37(11), pages 4633-4644, November.
- 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.
- Stephen Littlechild, 2009. "Stipulated settlements, the consumer advocate and utility regulation in Florida," Journal of Regulatory Economics, Springer, vol. 35(1), pages 96-109, February.
When requesting a correction, please mention this item's handle: RePEc:cam:camdae:1116. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake Dyer)
If references are entirely missing, you can add them using this form.