[Federal Register Volume 63, Number 54 (Friday, March 20, 1998)]
[Notices]
[Page 13648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7264]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. SA98-11-000]
Mull Drilling Company, Inc.; Notice of Petition for Adjustment
March 16, 1998.
Take notice that on March 5, 1998, Mull Drilling Company, Inc.
(MDC), filed a petition for adjustment under section 502(c) of the
Natural Gas Policy Act of 1978 (NGPA) [15 U.S.C. 3142(c) (1982)],
requesting an order from the Commission determining: (1) that a
Termination Agreement between MDC and Williams Gas Pipelines Central,
Inc., formerly: Williams Natural Gas Company, (Williams) absolves MDC
of its liability to make Kansas ad valorem tax refunds under those
terminated contracts; (2) that MDC is only responsible for Kansas ad
valorem tax refund amounts attributable to its working interest; (3)
that the payment of Kansas ad valorem tax refunds will create a special
hardship for MDC and, therefore, that MDC should be permitted to
amortize its refunds over a reasonable period of time; and (4) that
MDC's liability for Kansas ad valorem tax refunds attributable to the
Clarke and Zundle leases should be waived, on the basis that MDC can no
longer recoup any refunds from the owners of those leases.\1\ Absent
adjustment relief, the Kansas ad valorem tax refunds are required by
the Commission's September 10, 1997 order in Docket No. RP97-369-000 et
al.\2\ MDC's petition is on file with the Commission and open to public
inspection.
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\1\ MDC states that the Clarke and Zundle leases were each
dedicated to a Williams contract, and that the leases were sold to a
third party some years ago. In view of this, MDC asserts that it has
no ability to recoup refunds from future production of these two
leases.
\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 to make Kansas ad valorem
tax refunds, with interest, for the period from 1983 to 1988. That
order also provided that first sellers could, with the Commission's
prior approval, amortize their Kansas ad valorem tax refunds over a 5-
year period, although interest would continue to accrue on any
outstanding balance.
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\3\ Public Service Company of Colorado versus, 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) (Public Service).
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MDC states that it was a party to certain gas purchase contracts
entered into with Cities Service Gas Company (Williams' predecessor in
interest). MDC explains that, as the operator, of the leases dedicated
under those contracts, MDC acted on behalf of itself and, in some
cases, third-party working interest owners. MDC adds that it passed
along the funds, including the Kansas ad valorem tax reimbursement
funds, to the other working interest owners, and only retained those
funds attributable to its own working interest. In addition, MDC states
that all but two of the contracts with Williams were terminated on
March 31, 1993, and that the Termination Agreement with Williams
contained broad release and indemnity provisions under which the
parties agreed that all existing claims on the effective date of the
Termination Agreement, arising from the rights and obligations under
the subject contracts, would be forever ``released and discharged.''
MDC asserts that, because Williams did not exclude the Kansas ad
valorem tax refund liability from the terms of the Termination
Agreement, MDC should not owe any refunds to Williams for the Kansas ad
valorem tax reimbursements that Williams made (to MDC) under those
contracts.\4\
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\4\ MDC's adjustment petition identifies its Williams contracts
and the leases under those contracts, but does not specify which two
contracts were not covered by the 1993 Termination Agreement.
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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, 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 384.214, 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. 98-7264 Filed 3-19-98; 8:45 am]
BILLING CODE 6717-01-M