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News Digest

Fortnightly Magazine - October 15 1998

Commission directing Mohave Pipeline Co. to redesign rates for interstate natural gas transportation to employ the straight fixed-variable method, even though shippers had previously negotiated contracts with the pipeline for rates using the modified fixed-variable method.

The shippers claimed the new rate interfered with the contracts by reallocating risk for fixed-cost investment from the pipeline to customers, but the court ruled that the legal doctrine protecting parties to negotiated rate contracts from changes imposed by regulators did not apply because the FERC had shown that retention of the MFV rates would adversely affect the public interest. Texaco Inc. v. FERC, No. 93-1515 et al., 1998 WL 396242, July 17, 1998 (D.C.Cir).

News Digest is compiled by Lori A. Burkhart and Phillip S. Cross contributing legal editors, and by Beth Lewis, editorial assistant.

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