I have a general (not expert) undertsanding on Australian regulations and admin law and that is why I was in BEPPA.
I do not know the specific USA laws and regulatory process.
Have however tried to interpret what I think might be happenning.....
1) Very unusual for a regulator (FERC) to initiate a price (rate) review that is not part of the ordinary price review process. Thinking their motives may be political or some other driver as regulators generally are too busy anyway so don't want to go through more processes than need to.
2) Don't believe the regulator thinks it is on firm ground as proceedings are in front of an Administrative Law Judge. Therefore possibly 2 cases the FERC need to make. The first being to establish they have the regulated authority to require any price change and secondly to establish rates that are "just and reasonable" (cf "fair and reasonable" is the term used in Aust)
Both are substantial "grey areas" open to interpretation and without precedence.
3) In considering "just and reasonable" rates, believe NGPL and others should be able to mount an effective case to maintain rates (or at least minimal reduction) as there is no "black and white" way forward to establish "just and reasonable" rates as it depends on points of view and how these are evaluated.
Expect therefore it would be difficult for the FERC to prove its case, especially as I expect the current rates are based on the FERC's own decisions when rates were last reviewed.
In summary (based on my instincts only)
Believe there may be some game playing going on.
Assuming the regulator has the power to change rates as part of this process (which may still need to be determined?), would expect only a modest reduction in rates, if any.
I'm holding and less concerned now I have done some homework....but will keep an eye on.
PIH Price at posting:
$3.92 Sentiment: None Disclosure: Not Held
