What’s the issue?

A wave of rate cases we discussed a year ago has begun to be filed.

Why does it matter?

These rate cases will often dictate the revenue expectations for the pipelines involved for a number of years and are important for both equity owners and shippers to understand when assessing the risks of either investing in or shipping on the pipeline in question.

What’s our view?

The most recent case that was filed was by Florida Gas Transmission, a joint venture of Energy Transfer and Kinder Morgan. While most rate cases eventually settle, Energy Transfer has taken a very aggressive approach with regard to a case it has pending for its Panhandle Eastern pipeline. Energy Transfer appears to be managing this case as well. Therefore, it may not settle, but if it does, we expect that the final rate agreed to by the shippers may be up to 18% less than that proposed by Florida Gas Transmission. This could make the difference between the rate increasing or decreasing.


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