Pipeline rate case settlement satisfies propane industry coalition

June 3, 2013 By    

A settlement has been reached between Enterprise Products Partners and a propane industry coalition, establishing “fair and reasonable” shipping rates on the TE Products Pipeline, according to the National Propane Gas Association (NPGA).

As part of the settlement, Enterprise reimbursed NPGA with $300,000, the association reports.

The new rates end more than a year of legal proceedings between Enterprise and an NPGA-led propane industry coalition of more than 80 companies and state associations. The group came together last year to protest increased shipping rates on the pipeline.

The settlement agreement, approved by the Federal Energy Regulatory Commission (FERC), establishes stable shipping rates for the next two years, and it postpones a 4.5 percent FERC index rate increase until July 1, 2014, according to NPGA. The agreement will provide lower rates to ship propane than those sought by Enterprise in its initial filing. NPGA has previously said the rate increase would have amounted to 10 cents per gallon.

The new shipping rates became effective on May 1, 2013, and remain in effect for the next two years. The agreement will reduce the costs of shipping propane to consumers by $40-$70 million, NPGA estimates.

The propane industry also was successful in delaying by seven months, the longest period allowed by law, the initial implementation of Enterprise’s proposed rate increase. On average, propane marketers saved about $1,000 per transport load due to the delay, NPGA says.

About the Author:

Kevin Yanik was a senior editor at LP Gas Magazine.

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