PLI1- \- 000
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`Federal Eneray
`.
`Congress of the Untied Btateseos: 55509
`Washington, BE 20515
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`April 26, 2018
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`MAINES aN: po
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`The Honorable Chairman and Commissioners
`Federal Energy Regulatory Commission
`888 First Street, NE
`Washington, D.C. 20426
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`MPP
`DFE Ro So sroecyany
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`Dear Chairman McIntyre and Commissioners LaFleur, Chatterjee, Powelson and Glick,
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`Weare writing to express our deep concerns with the Federal Energy Regulatory Commission’s
`(FERC)recent sweeping decision in March to stop the recovery of income taxes when
`calculating cost-of service rates for those pipelines organized as Master Limited Partnerships
`(MLPs).
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`For decades, the MLP structure has allowed this vital industry to attract and successfully deploy
`capital. The pipelines that result from this process have, quite literally, enabled the energy
`renaissance we have seen in the oil and gas sector in recent decades and have served as the
`backboneof an increasingly gas-reliant electric generation fleet. Congress has repeatedly
`emphasized the importance ofthe MLPstructure, and has preserved our clear intent of allowing
`these pass-through entities to raise capital in a way that helps reduce the overall cost of energy.
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`However, in the wake ofthe UnitedAirlines, Inc. v. FERC decision, we were surprised and
`disappointed by the Revised Policy Statement of March 15, 2018 issued by the Commission.
`This is not merely because of the critical role that MLPs play in energy infrastructure, but also
`because, as the Commission explicitly found in its 2005 Policy Statement on Income Tax
`Allowances, income taxesare a cost of operating a pipeline that entities are, and should be,
`entitledto recover. Further, we note that the UnitedAirlines decision also seemingly left open to
`FERCthe option to better justify its longstanding practice on tax recovery, rather thanaflat,
`blanket denial ofit.
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`Given these concerns we not only ask that the Commission reconsider this decision to the fullest
`extent possible, but also ask that the Commissioners describe:
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`1. Whether you believe that income taxes are part of the operating costs of physical
`infrastructure;
`2. Whether there could possibly be a more targeted, case-by-case review ofthis issue for
`individual rate-cases and individual corporate tax structures;
`3. Whether you believe that all rates issued prior to the Revised Policy Statement were
`unjust and unreasonable;
`4. Whether you believe that United Airlines, Inc. v. FERC mandated a specific blanket
`action by the Commission or whether it, instead, mandated that FERC demonstrate
`whether unreasonable double-recovery of costs is occurring;
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`5. Whether there were additional procedural steps that could have been taken prior to the
`issuance of the Revised Policy Statement, and if so whether there are any possible
`remedies going forward;
`6. Whether an additional expression of Congressional intent is necessary.
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`Thank you very much for your prompt response and consideration of this matter.
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`Very respectfully,
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`LetA
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`ete Olson
`Member of Congress
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`PZ
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`Gene Green
`Member of Congress
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