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Anadarko Petroleum Corp. v. Federal Energy Regulatory Comm'n

Citation: 30 ELR 20170
No. No. 98-1227, 196 F.3d 1264/(D.C. Cir., 10/29/1999)

The court denied gas producers' petition to review two Federal Energy Regulatory Commission (FERC) rulings concerning the producers' obligation to repay taxes improperly collected under Natural Gas Production Act (NGPA) § 110, but remanded FERC's determination as to the starting date of the obligation. The court first holds that FERC correctly denied the producers' request for a blanket waiver of interest due on the overcharged taxes. FERC gave careful consideration to the equitable considerations that the producers offered for a blanket waiver. FERC's legal errors and delay are not grounds for altering the producers' interest obligations. The balance of equities is between the producers and the customers, not the producers and FERC, and FERC awarded the interest to make the customers whole. Further, the producers failed to establish detrimental reliance on FERC's view that the Kansas ad valorem tax at issue was a severance tax. Likewise, the court holds that FERC properly refused to reduce the producers' refund liability by the amount overtaxed by the state. The court next holds that in determining the extent of the producers' refund obligations, FERC misinterpreted a previous court decision requiring the producers to refund all taxes passed through to customers after the date when all interested parties were given notice in the Federal Register that the recoverability of the ad valorem tax under the NGPA was at issue. FERC improperly determined that the cutoff date applied to the tax transaction between the producers and the state rather than to the sales transaction between the producers and their customers. The transaction that caused the harm is the sales transaction, and it is the overcharges made in this individual transactions that the producers must now repay. Therefore, the court remanded the case for entry of an order prescribing a correct starting date for refunds.

The full text of this decision is available from ELR (7 pp., ELR Order No. L-114).

Counsel for Petitioners
Carla J. Stovall, Vice Chairman
State Parole Board
Landon State Office Bldg.
900 SW Jackson St., 4th Fl., Topeka KS 66612
(785) 296-3469

Counsel for Respondent
Andrew K. Soto
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20426
(202) 208-0200