[Federal Register: March 26, 1998 (Volume 63, Number 58)]
[Notices]               
[Page 14692-14693]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26mr98-62]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket No. SA98-29-000]

 
Kaiser-Francis Oil Company; Notice of Petition for Adjustment

March 20, 1998.
    Take notice that on March 9, 1998, Kaiser-Francis Oil Company 
(Kaiser) filed a petition for adjustment under section 502(c) of the 
Natural Gas Policy Act of 1978 (NGPA),\1\ requesting that the 
Commission: (1) Grant an adjustment to its procedures to allow Kaiser 
to defer payment of principal and interest attributable to royalties 
for one-year until March 9, 1999; and (2) Grant a procedural adjustment 
to allow Kaiser to place into an escrow account: (i) amounts 
attributable to royalty refunds which have not been collected from the 
royalty owner (principal and interest); (ii) interest on royalty 
amounts which have been recovered from the royalty owners (the 
principal of which was refunded); and (iii) interest on the total 
amount of refunds allegedly due (excluding royalties). The March 9, 
1998, deadline was established for first sellers to remit refunds of 
Kansas ad valorem taxes to their pipeline purchasers, as required by 
the Commission's September 10, 1997 order in Docket Nos. GP97-3-000, 
GP97-4-000, GP97-5-000, and RP97-369-000.\2\ Kaiser's petition is on 
file with the Commission and open to public inspection.
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    \1\ 15 U.S.C. 3142(c) (1982).
    \2\ See 80 FERC para. 61,264 (1997); order denying reh'g issued 
January 28, 1998, 82 FERC para. 61,058 (1998).
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    The Commission's September 10 order on remand from the D.C. Circuit 
Court of Appeals \3\ directed first sellers under the NGPA to make 
Kansas ad valorem tax refunds, with interest, for the period from 1983 
to 1988. The Commission issued a January 28, 1998 order in Docket No. 
RP98-39-001, et al. (January 28, Order),\4\ clarifying the refund 
procedures, stating that producers could request additional time to 
establish the uncollectability of royalty refunds, and that first 
seller may file requests for NGPA section 502(c) adjustment relief from 
the refund requirements and the timing and procedures for implementing 
the refunds, based on the individual

[[Page 14693]]

circumstances applicable to each first seller.
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    \3\ Public Service Company of Colorado v. FERC, 91 F.3d 1478 
(D.C. 1996), cert. denied, Nos. 96-954 and 96-1230 (65 U.S.L.W. 3751 
and 3754, May 12, 1997).
    \4\ 82 FERC para. 61,059 (1998).
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    Kaiser states it is substantially and adversely affected by the 
potential Kansas ad valorem tax refund requirement. Kaiser is not 
seeking to relieve itself of that refund obligation. Rather Kaiser 
seeks to establish procedures which ensure: (a) That it pays only that 
which is legitimately owned; and (b) that if it is subsequently 
determined that its refund liability was less than that originally 
claimed by Panhandle Eastern Pipe Line Company (Panhandle) in Docket 
No. RP98-40-000, it can recover the overpayment. Accordingly, Kaiser 
requests an adjustment to the general refund procedures to permit it to 
pay the following amount into an escrow account: (a) the principal and 
interest on the uncollected royalties; and (b) interest on amounts not 
disputed herein other than amounts listed in (a) above.
    Kaiser states that with respect to the royalty amounts of the 
alleged refunds due, Kaiser has been working diligently to determine 
its potential refund liability and to obtain contribution from its 
royalty owners. However, Kaiser has not been able either to obtain 
reimbursement or confirm the uncollectibility of the vase majority of 
its royalty amounts for which refunds are due. Rather than deferring 
royalty refunds, Kaiser would prefer to pay the amount of the refunds 
which its believes may be uncollectible into an escrow account. 
Accordingly, Kaiser intends to place the amount of $33,830.61 
(reflecting all royalties and related interest) into its escrow account 
and hereby requests all necessary approval to do so. Kaiser requests a 
one-year extension of the refund due date for the purpose of allowing 
it to try to collect the royalty refunds. In addition, Kaiser seeks 
authorization to place the following amounts into its escrow account: 
(a) the interest on the royalty refunds, the principal of which is paid 
to Panhandle; and (b) the interest on refunds due (other than 
royalties), in the amount of $64,627.10. Kaiser intends to place these 
amounts in its escrow account on March 9, 1998, and requests 
appropriate adjustment relief to authorize that plan.
    Kaiser states that although there are issues relating to portions 
of the principal refunds which are pending before the Court,\5\ to 
demonstrate its good faith in these proceedings Kaiser has paid the 
principal amount of refunds attributable to Kaiser's working interest 
in the amount of $39,912.22 to Panhandle. Should the Commission provide 
assurances that kaiser will be able to recover any overpayments without 
having to initiate a prompt return of refund amounts determined not to 
be due (such return of refunds not dependent upon recovery from 
consumers), Kaiser would agreed to waive this request for escrowing 
certain monies. Without such assurances, Kaiser is entitled to have its 
property protested until the issue of liability has been fully resolved 
in Courts or Congress.
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    \5\ See, Case No. 98-60043, United States Court of Appeals for 
the Fifth Circuit in Anadarko Petroleum Corp. v. FERC, and Union 
Pacific Resources Company v. FERC.
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    Any person desiring to be heard or to make any protest with 
reference to said petition should on or before 15 days after the date 
of publication in the Federal Register of this notice, file with the 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, D.C. 20426, a motion to intervene or a protest in 
accordance with the requirements of the Commission's Rules of Practice 
and Procedure (18 CFR 385.214, 385.211, 385.1105, and 385.1106). All 
protests filed with the Commission will be considered by it in 
determining the appropriate action to be taken but will not serve to 
make the protestants parties to the proceeding. Any person wishing to 
become a party to a proceeding or to participate as a party in any 
hearing therein must file a motion to intervene in accordance with the 
Commission's Rules.
David P. Boergers,
Acting Secretary.
[FR Doc. 98-7849 Filed 3-25-98; 8:45 am]
BILLING CODE 6717-01-M