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Gulf South Pipeline Co., LP v. Federal Energy Regulatory Commission

ELR Citation: 50 ELR 20089
Nos. 19-1074, (D.C. Cir., 04/10/2020)

The D.C. Circuit vacated FERC's refusal to allow a natural gas pipeline company to impose incremental-plus rates to cover the costs of an expansion project. The company argued that FERC should have approved the incremental-plus rates and that its failure to do so was arbitrary and capricious. The court found that the Commission's sole rationale for denying the rates—that the expansion facilities and existing facilities would be operated as a single integrated system—failed to adequately explain why this finding justified rejecting the rates, and thus that its denial of the rates was arbitrary and capricious. It therefore vacated the Commission's order as to the incremental-plus rates and remanded for further proceedings.