Williams Announces FERC Filing for Transco Rate Case Settlement
January 02 2020 - 7:30AM
Business Wire
The Settlement provides rate certainty for
customers while allowing Transco to recover its costs
The company anticipates FERC approval of the
Settlement during the second quarter of 2020
Williams (NYSE: WMB) announced today that it has filed a
comprehensive Stipulation and Agreement (“Settlement”) with the
Federal Energy Regulatory Commission (“FERC”), which would settle
all aspects of the Transcontinental Gas Pipe Line Company, LLC
(“Transco”) rate case currently pending before the FERC. The
company anticipates FERC approval of the Settlement during the
second quarter of 2020. The Settlement provides rate certainty for
customers while allowing Transco to recover its costs, safely and
reliably operate its infrastructure, and expand to meet the needs
of its customers.
Including revenue impacts and other related accounting entries,
Williams expects approximately $76 million favorable impact to
EBITDA in 2020 versus 2018 (the last full year with no rate case
effect), which was included in 2020 guidance provided at Williams’
Analyst Day on Dec. 5, 2019.
“Overall, we are pleased with the outcome of the Settlement and
very appreciative of our customers’ interactions throughout the
process,” said Micheal Dunn, Executive Vice President and Chief
Operating Officer of Williams. “The Settlement provides a fair
return to Transco on its base service and also provides value to
shippers, as evidenced by the recent remarketing of available
Transco capacity that resulted in a new 82-year commitment with the
successful shipper.”
The Transco rate case was initiated in August 2018 to comply
with a filing obligation under a prior settlement and to recover
costs associated with increased capital expenditures and operations
and maintenance expenses. As part of the Settlement, Transco and
the interveners agreed to a comprehensive “black box” resolution
for the cost of service, rate design, cost classification and
allocation to achieve an acceptable outcome for all parties. While
the Settlement includes a 12.5% ROE for cost-based recourse rates
offered on future infrastructure expansions projects, the
Settlement does not impact Transco’s existing negotiated rate
contracts, which make up 51% of 2019 revenue, or Transco’s ability
to offer negotiated rate contracts for future infrastructure
expansion projects that can exceed 12.5% return on equity.
Under the terms of the Settlement, Transco and the parties have
agreed to a rate moratorium through Aug. 31, 2021. In addition,
Transco has agreed to file a new rate case no later than Aug. 30,
2024. The Settlement also provides that following implementation of
the Settlement, a Technical Working Group comprised of shippers and
Williams representatives will address, among other things,
emissions reductions and modernization on the Transco system, and
Transco can propose a surcharge mechanism with shipper and FERC
agreement without a rate case after the moratorium.
Williams recognizes the important role natural gas plays in
addressing environmental concerns regarding air quality and climate
change, particularly when it comes to displacing or providing
alternatives to more polluting fuels. Natural gas is a flexible,
lower-emission fuel compared to other hydrocarbons such as coal or
heating oil. And, because the U.S. has an abundant supply of
natural gas, using this local, cleaner resource has significantly
reduced U.S. emissions. As one of the nation’s largest gatherers,
processors and transporters of natural gas, Williams plays a
critical role in bringing this clean and affordable resource to
electric generation, industry and homes, resulting in cleaner
air.
About Williams
Williams (NYSE: WMB) is committed to being the leader in
providing infrastructure that safely delivers natural gas products
to reliably fuel the clean energy economy. Headquartered in Tulsa,
Oklahoma, Williams is an industry-leading, investment grade C-Corp
with operations across the natural gas value chain including
gathering, processing, interstate transportation and storage of
natural gas and natural gas liquids. With major positions in top
U.S. supply basins, Williams connects the best supplies with the
growing demand for clean energy. Williams owns and operates more
than 30,000 miles of pipelines system wide – including Transco, the
nation’s largest volume and fastest growing pipeline – and handles
approximately 30 percent of the natural gas in the United States
that is used every day for clean-power generation, heating and
industrial use. www.williams.com
Portions of this document may constitute “forward-looking
statements” as defined by federal law. Although the company
believes any such statements are based on reasonable assumptions,
there is no assurance that actual outcomes will not be materially
different. Any such statements are made in reliance on the “safe
harbor” protections provided under the Private Securities Reform
Act of 1995. Additional information about issues that could lead to
material changes in performance is contained in the company’s
annual and quarterly reports filed with the Securities and Exchange
Commission.
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MEDIA: media@williams.com (800) 945-8723
INVESTOR CONTACTS: Brett Krieg (918) 573-4614
Grace Scott (918) 573-1092
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