CALDERWOOD & HARKNESS LLP Attorneys at Law
1601 K Street NW, Suite 900 Washington, DC 20006
Telephone: (202) 555-7400 Facsimile: (202) 555-7401 www.calderwoodharkness.com
November 15, 2024
VIA ELECTRONIC FILING AND FIRST CLASS MAIL
The Honorable Clara Whitfield Administrative Law Judge Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
Re: Ridgeline Midstream Services LLC — FERC Docket Nos. RP22-847-000 (Rate Case) and RP22-847-001 (Interconnection) Proposed Procedural Schedule for Resumption of Track II Hearing
Dear Judge Whitfield:
I. Introduction and Purpose of Letter
Calderwood & Harkness LLP, on behalf of our client Ridgeline Midstream Services LLC ("Ridgeline" or "RMS"), respectfully submits this letter proposing a procedural schedule for the resumption of the Track II hearing in the above-captioned proceedings. The undersigned, George Trujillo, Responsible Partner, Energy & Infrastructure Practice Group, Calderwood & Harkness LLP, is lead counsel for Ridgeline in this matter, designated as Calderwood & Harkness Matter No. 1016-00005.
Ridgeline is a Delaware limited liability company, wholly owned by Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted limited company. Ridgeline's principal office is located at 700 Kanawha Boulevard East, Suite 1400, Charleston, West Virginia 25301. Ridgeline is engaged in the interstate transportation of natural gas and is subject to the jurisdiction of the Federal Energy Regulatory Commission ("FERC" or "the Commission") under the Natural Gas Act ("NGA"), 15 U.S.C. § 717 et seq.
These consolidated proceedings involve Ridgeline's application for approval of an initial tariff rate for interstate transportation service on the Ridgeline Pipeline System and authorization for physical interconnection with Appalachian Trunk Pipeline Company, LLC ("ATPC"), filed on May 12, 2022 under Sections 4 and 7 of the Natural Gas Act, 15 U.S.C. §§ 717c and 717f, and the Commission's implementing regulations at 18 C.F.R. Parts 154, 157, and 284. As more fully described below, the procedural schedule in this matter has been stayed since February 6, 2023 to permit Ridgeline to address a Deficiency Letter issued by the Commission's Office of Energy Market Regulation ("OEMR"). Ridgeline has now substantially completed the comprehensive tariff redesign necessitated by that Deficiency Letter and hereby proposes a procedural schedule for the resumption of proceedings, including a timeline for the filing of supplemental testimony, answering testimony, rebuttal, and an evidentiary hearing.
II. Background and Procedural History
A. Initial Filing and Intervention Phase
On May 12, 2022, Ridgeline filed its application with the Commission proposing an initial recourse rate of $0.2265 per dekatherm ("Dth") for firm interstate transportation service on the Ridgeline Pipeline System. The proposed recourse rate comprised a reservation charge of $0.2223/Dth and a usage charge of $0.0042/Dth, derived from a rate base of $612.40 million and a total cost of service of $97.36 million. The filing included Ridgeline's FERC Gas Tariff, Original Volume No. 1, submitted under Part 284, Subpart G of the Commission's regulations, providing for open-access transportation service on a firm and interruptible basis.
On June 14, 2022, the Commission issued a Notice of Filing, establishing August 15, 2022 as the deadline for motions to intervene and protests. Three parties timely filed motions to intervene. The Mountainside Gas Producers Coalition ("MGPC"), a trade association representing natural gas producers operating in the Appalachian Basin, filed its motion to intervene on July 28, 2022. The Clearwater Municipal Gas Authority ("CMGA"), a municipal gas distribution authority serving the Borough of Clearwater and surrounding communities in Greene County, Pennsylvania, filed its motion to intervene on August 1, 2022. On August 15, 2022 — the final day of the intervention period — ATPC filed its protest and motion to intervene, contesting the proposed interconnection metering station design at the Wetzel County Interconnect and challenging Ridgeline's proposed allocation of the $14.7 million in interconnection facilities costs to ATPC, asserting that such allocation was disproportionate to ATPC's share of the benefits and inconsistent with the Commission's precedent regarding cost-causation principles.
On September 22, 2022, the Commission issued an order granting all three motions to intervene, setting the matter for hearing under the Commission's Track II procedural guidelines, consolidating the rate case proceeding in Docket No. RP22-847-000 with the interconnection proceeding in Docket No. RP22-847-001, and appointing Settlement Judge Howard Margolis to convene settlement conferences in an effort to resolve the disputed issues.
B. Pre-Hearing Phase and Testimony
On November 14, 2022, Your Honor was appointed as the presiding Administrative Law Judge in this consolidated proceeding. A prehearing conference was held on the same date, at which the parties discussed the scope of the issues and an initial procedural schedule was established.
In accordance with that schedule, Ridgeline filed its direct testimony on December 5, 2022, consisting of prepared testimony and exhibits of seven witnesses:
(1) James K. Winfield, Chief Executive Officer and President, Ridgeline Midstream Services LLC, testifying regarding Ridgeline's corporate structure, business plan, the commercial rationale for the Ridgeline Pipeline System, and the need for the proposed interconnection with ATPC;
(2) Angela Moretti, Vice President of Finance & Treasurer, Ridgeline Midstream Services LLC, testifying regarding the cost of service, rate base composition, depreciation methodology, operating and maintenance expenses, administrative and general expenses, revenue credits, and billing determinants;
(3) Thomas Greaves, Vice President of Engineering & Operations, Ridgeline Midstream Services LLC, testifying regarding the design, construction, and operational parameters of the Ridgeline Pipeline System, including compressor station specifications and the proposed interconnection facilities at the Wetzel County Interconnect;
(4) Dr. Natasha Orlov, Director of Rates & Regulatory, Ridgeline Midstream Services LLC, testifying regarding the derivation of the proposed tariff rate, the proposed rate design methodology, and compliance with applicable Commission regulations and orders;
(5) Dr. Raymond Braswell, President and Lead Consultant, Braswell Energy Consulting Group LLC, testifying regarding the return on equity ("ROE"), weighted average cost of capital ("WACC"), and the appropriate capital structure for Ridgeline;
(6) Two additional supporting witnesses addressing environmental compliance matters and gas quality specifications, whose testimony is not directly implicated by the present procedural proposal.
Answering testimony was filed by all three intervenors on January 9, 2023, as follows:
• ATPC, through its counsel Kellner, Royce & Dillard LLP (William Pratt, Senior Partner), filed answering testimony addressing the interconnection facilities design, proposed metering station specifications, and the cost allocation dispute, as well as testimony concerning Ridgeline's proposed ROE;
• MGPC, through its counsel Whitmore & Sable LLP (Rebekah Montague, Partner), filed answering testimony that included the prepared testimony of its rate expert, Dr. Eleanor Vasquez, challenging Ridgeline's original 100% load factor assumption, proposed ROE of 14.00%, and certain cost-of-service components;
• CMGA, through its counsel Fordham Municipal Law Group PC (Stephen Greer, Principal), filed answering testimony primarily addressing the impact of Ridgeline's proposed rate on municipal gas distribution ratepayers and supporting a lower load factor assumption.
C. Deficiency Letter and Stay
On January 19, 2023, before the filing of rebuttal testimony, the Commission's Office of Energy Market Regulation — through Lead Economic Analyst Dr. Miriam Okafor — issued a Deficiency Letter identifying fourteen (14) separate deficiencies in Ridgeline's tariff filing. The Deficiency Letter required Ridgeline to address each identified deficiency before the proceeding could advance. The fourteen deficiency items were as follows:
Item 1: Inadequate ROE support — the Commission's staff determined that Ridgeline's original proposed ROE of 14.00% was insufficiently supported by the proxy group analysis submitted with the original filing, and that the DCF analysis failed to account for certain required adjustments under the Commission's current ROE methodology;
Item 2: Missing fuel, lost and unaccounted-for gas ("FL&U") tracker mechanism — the tariff lacked a mechanism for periodic adjustment of FL&U rates based on actual experience;
Item 3: Missing interruptible transportation ("IT") rate derivation — the tariff included a reference to IT service but did not include a derivation of the IT rate or an IT rate schedule;
Item 4: Insufficient load factor support — the original filing's assumption of a 100% load factor for billing determinant purposes was unsupported by market or operational data;
Item 5: No capacity release provisions — the tariff failed to include provisions governing the release of capacity by firm shippers in accordance with Commission policy and applicable regulations;
Item 6: Incomplete NAESB compliance — the tariff did not fully incorporate standards promulgated by the North American Energy Standards Board ("NAESB"), Wholesale Gas Quadrant ("WGQ"), Version 3.2, as required by Commission Order No. 587-W;
Item 7: Missing electronic bulletin board ("EBB") requirements — the tariff failed to include adequate provisions for the posting of available capacity, transactional information, and operational notices on Ridgeline's EBB in accordance with 18 C.F.R. § 284.12;
Item 8: Inadequate shipper-must-have-title provisions — the tariff did not contain provisions requiring shippers to hold title to gas tendered for transportation or to certify title in accordance with Commission regulations;
Item 9: Interconnection agreement not filed as a rate schedule — the proposed interconnection agreement between Ridgeline and ATPC was submitted as an exhibit to the application rather than as a FERC rate schedule, as required by Commission policy for interconnection agreements involving jurisdictional facilities;
Item 10: No penalty revenue crediting provisions — the tariff failed to include provisions for the crediting of scheduling penalty and cashout revenues to non-offending shippers;
Item 11: Inadequate creditworthiness provisions — the tariff's creditworthiness standards did not include sufficient detail regarding financial assurance requirements, acceptable forms of security, or procedures for credit reevaluation;
Item 12: Missing segmentation and flexible receipt/delivery provisions — the tariff did not include provisions permitting firm shippers to segment capacity or utilize flexible receipt and delivery points;
Item 13: No GHG cost recovery provisions — the tariff did not address the recovery of costs associated with greenhouse gas ("GHG") emissions compliance, including potential future carbon pricing mechanisms;
Item 14: Failure to address Order No. 2222 DER aggregation implications — the tariff did not address the potential impact of distributed energy resource ("DER") aggregation on Ridgeline's system operations or rate design, as contemplated by the Commission's Order No. 2222.
In light of the scope of the Deficiency Letter, Your Honor issued an order on February 6, 2023, staying the procedural schedule pending Ridgeline's response to the identified deficiencies.
D. Partial Response and Extensions
On March 15, 2023, Ridgeline filed a partial response to the Deficiency Letter, addressing eight of the fourteen items — specifically, Items 1 through 4 and Items 7 through 10. The partial response included revised ROE support, a preliminary FL&U tracker proposal, an IT rate derivation, updated load factor support documentation, EBB compliance provisions, shipper-must-have-title provisions, a restructured interconnection agreement, and penalty revenue crediting provisions. However, the remaining six deficiency items — particularly those relating to capacity release, NAESB compliance, creditworthiness, segmentation and flexible receipt/delivery, GHG cost recovery, and Order No. 2222 DER aggregation — required more comprehensive tariff revisions.
On April 15, 2023, Ridgeline engaged Braswell Energy Consulting Group LLC (Dr. Raymond Braswell, Lead Consultant; engagement number BEC-2023-0041) to conduct a comprehensive redesign of the entire FERC Gas Tariff, Original Volume No. 1, in order to address all fourteen deficiency items in an integrated and internally consistent manner.
Given the scope of the tariff redesign effort, Ridgeline requested three successive extensions of the response deadline:
First Extension: On April 28, 2023, Ridgeline filed a request for a 120-day extension. Your Honor granted the request on May 10, 2023, establishing a new deadline of August 28, 2023.
Second Extension: On August 25, 2023, Ridgeline filed a request for an additional 180-day extension, citing the complexity of the tariff redesign and the need to coordinate with ATPC on the restructured interconnection agreement. Your Honor granted the request on September 8, 2023, establishing a new deadline of February 23, 2024, and designating the proceeding status as "dormant" on the Commission's docket.
Third Extension: On February 20, 2024, Ridgeline filed a request for a twelve-month extension, representing that the tariff redesign was well advanced but required additional time for completion, internal review, and coordination with ATPC's engineering staff on the interconnection agreement provisions. Your Honor granted the extension with conditions on March 4, 2024, establishing a final deadline of February 21, 2025, and ordering Ridgeline to file quarterly status reports with the ALJ and all parties of record.
E. Quarterly Status Reports
In compliance with Your Honor's March 4, 2024 order, Ridgeline has filed three quarterly status reports:
• The first quarterly status report was filed on June 15, 2024, reporting that the initial drafts of the redesigned tariff provisions addressing Deficiency Items 5, 6, 11, 12, 13, and 14 had been completed and were undergoing internal review.
• The second quarterly status report was filed on September 14, 2024, reporting that the second comprehensive draft of the redesigned tariff was complete, that Ridgeline and ATPC had conducted two technical conferences to discuss the restructured interconnection agreement, and that the revised cost-of-service model incorporating updated billing determinants and ROE assumptions was substantially complete.
• The third quarterly status report was filed on December 13, 2024, reporting that the fourth and near-final draft of the redesigned tariff was in final internal review, that Ridgeline anticipated completing all remaining items well in advance of the February 21, 2025 deadline, and that Ridgeline intended to file the redesigned tariff together with supplemental direct testimony.
All three quarterly status reports confirmed Ridgeline's substantial progress on the tariff redesign and Ridgeline's firm intention to meet the February 21, 2025 filing deadline.
F. Settlement Conference Status
Four settlement conferences have been held before Settlement Judge Margolis during the course of these proceedings:
(1) November 30, 2022 — initial settlement conference; parties exchanged preliminary settlement positions;
(2) March 8, 2023 — second settlement conference, held shortly after Ridgeline's partial deficiency response; parties discussed the impact of the Deficiency Letter on settlement parameters;
(3) July 12, 2023 — third settlement conference; parties explored potential narrowing of issues in light of Ridgeline's engagement of Braswell Energy Consulting Group and the anticipated tariff redesign;
(4) January 18, 2024 — fourth settlement conference; parties exchanged updated positions but were unable to reach agreement.
No settlement has been reached to date. Based on the positions exchanged at the most recent settlement conference, the parties remain approximately $0.058/Dth apart on the recourse rate. Three key sticking points continue to divide the parties:
(1) Return on Equity. ATPC proposes an ROE of 10.75%, MGPC proposes 11.25%, and Ridgeline proposes 12.50%. The intervenors contend that Ridgeline's proposed ROE is excessive in light of current capital market conditions and the relatively low risk profile of the Ridgeline Pipeline System given its receipt of a long-term precedent agreement. Ridgeline maintains that its proposed 12.50% ROE — reduced from the original 14.00% — is within the range supported by its updated DCF proxy group analysis and is appropriate in light of the risks associated with new pipeline construction and the current regulatory environment.
(2) Interconnection Cost Allocation. ATPC insists on a 50/50 cost allocation split, which would result in each party bearing approximately $11.15 million of the $22.3 million total interconnection facilities cost. Ridgeline's proposed allocation is 34.1%/65.9%, under which Ridgeline would bear $7.6 million and ATPC would bear $14.7 million of the total cost. Ridgeline contends that its proposed allocation is consistent with cost-causation principles because ATPC's existing facilities at Milepost 412.6 require more extensive modifications than Ridgeline's new-build interconnection facilities.
(3) Load Factor. The intervenors advocate for a load factor of 85% or higher for purposes of deriving billing determinants, while Ridgeline's revised proposal uses a 75% load factor. The difference between a 75% and 85% load factor has a material impact on the per-unit recourse rate, with a higher load factor producing a lower rate by spreading fixed costs over a larger volume of throughput.
In summary, MGPC and ATPC advocate a rate ceiling of approximately $0.2560/Dth, while Ridgeline's current proposed rate floor is $0.3140/Dth.
III. Status of Tariff Redesign and Anticipated February 21, 2025 Filing
Ridgeline, with the assistance of Braswell Energy Consulting Group LLC, has substantially completed the comprehensive redesign of FERC Gas Tariff, Original Volume No. 1. As reported in the three quarterly status reports, the redesigned tariff addresses all fourteen deficiency items identified in the January 19, 2023 Deficiency Letter. Ridgeline provides the following summary of the key changes incorporated in the redesigned tariff for the information of the ALJ and the parties:
Rate Design Methodology. The redesigned tariff employs a modified fixed-variable rate methodology at a 75% load factor, replacing the original 100% load factor assumption that was identified as unsupported in Deficiency Item 4. The 75% load factor is supported by Ridgeline's analysis of historical throughput data, contractual demand levels, and market projections prepared by Braswell Energy Consulting Group.
Revised Billing Determinants. At the revised 75% load factor, billing determinants are calculated as follows: 1,200,000 Dth/d design capacity × 365 days × 75% load factor = 328,500,000 Dth per year. This represents a reduction from the original billing determinants of 438,000,000 Dth per year derived under the 100% load factor assumption.
Revised Return on Equity. The redesigned tariff reflects a revised ROE of 12.50%, based on an updated discounted cash flow ("DCF") proxy group analysis as of Q3 2024 conducted by Dr. Braswell. This represents a reduction from the original proposed ROE of 14.00% and addresses Deficiency Item 1.
Revised Weighted Average Cost of Capital. The revised WACC is 9.2375%, calculated as follows: (0.55 × 12.50% equity return) + (0.45 × 5.25% cost of debt) = 6.875% + 2.3625% = 9.2375%. The capital structure is maintained at 55% equity and 45% debt, and the cost of debt remains at 5.25%, reflecting the weighted average coupon rate on Ridgeline's outstanding long-term debt obligations.
Rate Base. The rate base remains unchanged at $612.40 million, representing the original cost of the Ridgeline Pipeline System less accumulated depreciation and amortization, plus working capital allowances.
Revised Total Cost of Service. The revised total cost of service is $103.15 million, comprising the following components:
• Return on rate base: $56.57 million ($612.40 million × 9.2375%)
• Depreciation expense: $14.68 million
• Revised operations and maintenance expense: $13.92 million
• Revised administrative and general expense: $5.14 million
• Taxes other than income taxes: $3.80 million
• Revised income tax allowance: $15.04 million
• Less: Revenue credits of ($6.00 million)
• Total cost of service: $103.15 million
Revised Proposed Recourse Rate. The revised proposed recourse rate is $0.3140/Dth, comprising a reservation charge of $0.3102/Dth and a usage charge of $0.0038/Dth. This represents an increase from the original proposed recourse rate of $0.2265/Dth, primarily attributable to the reduction in billing determinants resulting from the revised 75% load factor, partially offset by the reduction in ROE from 14.00% to 12.50%.
New and Revised Tariff Provisions. The redesigned tariff includes the following new and revised provisions, addressing the remaining deficiency items:
• A new FL&U tracker mechanism, providing for semi-annual adjustment of FL&U charges based on actual experience (Deficiency Item 2);
• A new IT rate schedule with full derivation of the interruptible transportation rate (Deficiency Item 3);
• Comprehensive capacity release provisions in accordance with 18 C.F.R. § 284.8 and Commission precedent (Deficiency Item 5);
• Operational flow order provisions fully compliant with NAESB Wholesale Gas Quadrant Version 3.2 standards, as required by Commission Order No. 587-W (Deficiency Item 6);
• Enhanced EBB posting requirements in accordance with 18 C.F.R. § 284.12 (Deficiency Item 7);
• Revised shipper-must-have-title provisions (Deficiency Item 8);
• The restructured interconnection agreement filed as a FERC rate schedule (Deficiency Item 9);
• Penalty revenue crediting provisions (Deficiency Item 10);
• Comprehensive creditworthiness provisions including financial assurance requirements, acceptable forms of security, and credit reevaluation procedures (Deficiency Item 11);
• Segmentation and flexible receipt/delivery point provisions (Deficiency Item 12);
• GHG emission cost recovery provisions, including a tracker mechanism for potential future carbon pricing costs (Deficiency Item 13);
• Provisions addressing Order No. 2222 DER aggregation implications for Ridgeline's system planning and operations (Deficiency Item 14).
The fourth and near-final draft of the redesigned tariff, dated November 2024, is currently in final internal review by Ridgeline's management and legal team. Ridgeline confirms its firm intention to file the redesigned tariff and supplemental direct testimony on or before the February 21, 2025 deadline established by Your Honor's March 4, 2024 order.
The supplemental direct testimony will be submitted by at least two witnesses:
(1) Dr. Natasha Orlov, Director of Rates & Regulatory, who will testify regarding the redesigned tariff provisions and Ridgeline's responses to all fourteen deficiency items, including the rationale for each new or revised tariff provision and its consistency with Commission regulations and policy; and
(2) Angela Moretti, Vice President of Finance & Treasurer, who will testify regarding the revised cost of service, updated rate base components, revised billing determinants at the 75% load factor, the revised ROE and WACC, and the derivation of the revised recourse rate of $0.3140/Dth.
Ridgeline reserves the right to submit supplemental testimony from additional witnesses as may be necessary to address matters arising from the tariff redesign.
IV. Description of the Ridgeline Pipeline System
For the convenience of the ALJ and the parties, and to provide context for the proposed procedural schedule, Ridgeline provides the following brief summary of the Ridgeline Pipeline System:
The Ridgeline Pipeline System is a 187-mile, 24-inch-diameter high-pressure natural gas transmission pipeline located in West Virginia and Pennsylvania. The pipeline has a receipt point at the Wetzel County Interconnect in Wetzel County, West Virginia, and a delivery point at the Waynesburg Compressor Station in Greene County, Pennsylvania. The system has a design capacity of 1.2 billion cubic feet per day ("Bcf/d"), or 1,200,000 Dth/d, and currently operates at a throughput of approximately 680 million cubic feet per day ("MMcf/d"), representing an approximate utilization rate of 56.67%.
The pipeline system includes three compressor stations — the Wetzel Compressor Station, the Mannington Compressor Station, and the Waynesburg Compressor Station — with aggregate installed compression of 45,000 horsepower. The Ridgeline Pipeline System was placed in service on October 1, 2021, and had an original construction cost of approximately $587.2 million.
The proposed interconnection at the Wetzel County Interconnect would tie Ridgeline's system into ATPC's existing 30-inch-diameter mainline at ATPC Milepost 412.6. The interconnection has a design capacity of 800 MMcf/d bidirectional flow, with the potential for expansion to 1.2 Bcf/d. The total estimated cost of the interconnection facilities is $22.3 million. The original target in-service date for the interconnection facilities was the fourth quarter of 2023; however, this date has been delayed pending resolution of the cost allocation dispute in the present proceeding.
V. Proposed Procedural Schedule
A. Scheduling Principles
Ridgeline proposes the following procedural schedule for the resumption of the Track II hearing in this consolidated proceeding. The proposed schedule is designed to provide all parties with adequate time to review the redesigned tariff and supplemental testimony, prepare and file responsive testimony, and proceed to an evidentiary hearing in an orderly and efficient manner.
In developing this proposed schedule, Ridgeline has been guided by several principles. First, the schedule should be consistent with the Commission's Track II procedural guidelines and the general expectations of the presiding ALJ regarding the pace of proceedings. Second, the schedule should balance the need for expeditious resolution of this proceeding — which has been dormant since September 2023 and pending since May 2022 — with the parties' legitimate needs for adequate time to prepare responsive filings, particularly given the comprehensive nature of the tariff redesign. Third, the schedule should recognize that the interconnection authorization proceeding in Docket No. RP22-847-001 and the rate case proceeding in Docket No. RP22-847-000 should proceed on a consolidated schedule, given the interrelated nature of the issues and the Commission's September 22, 2022 consolidation order. Fourth, the schedule should accommodate parallel settlement discussions without allowing settlement efforts to delay the hearing track.
B. Proposed Schedule
Ridgeline proposes the following procedural schedule:
C. Rationale for Proposed Timeline
Ridgeline respectfully submits that the proposed timeline is both reasonable and appropriate for the following reasons.
The sixty (60) day period proposed for answering testimony reflects the complexity and comprehensiveness of the redesigned tariff. The supplemental filing will address all fourteen deficiency items identified in the January 19, 2023 Deficiency Letter, including a new rate design methodology employing a 75% load factor, a revised cost of service, a revised ROE and WACC, and numerous new and revised tariff provisions addressing capacity release, NAESB compliance, creditworthiness, segmentation, GHG cost recovery, and DER aggregation. Ridgeline recognizes that intervenors and FERC Trial Staff will require adequate time to review the redesigned tariff and its supporting workpapers, and that the intervenors' experts may need to update their own analyses in light of the revised filing parameters.
At the same time, Ridgeline respectfully submits that sixty days is sufficient for this purpose because substantial portions of the existing record from the December 5, 2022 direct testimony and January 9, 2023 answering testimony remain relevant and need not be relitigated in the supplemental phase. The rate base, for example, remains unchanged at $612.40 million, and many of the factual predicates established in the original testimony — including the description of the pipeline system, the commercial rationale for the project, and the engineering specifications for the interconnection facilities — continue to apply. The supplemental testimony is focused on the specific tariff redesign changes and deficiency item responses, rather than a wholesale relitigation of all issues.
To further facilitate the efficient preparation of answering testimony, Ridgeline is prepared to make its witnesses available for depositions during the answering testimony period, should the ALJ deem such depositions appropriate. Ridgeline anticipates that informal technical conferences between the parties' experts on cost-of-service methodology and rate design may also be productive during this period.
The proposed five (5) hearing days are based on Ridgeline's assessment of the likely number of witnesses and the scope of the contested issues. Ridgeline anticipates presenting at least two supplemental witnesses (Dr. Orlov and Ms. Moretti) at the hearing. The intervenors may present additional witnesses beyond those who submitted answering testimony in January 2023, depending on the scope of the supplemental issues. Ridgeline believes that five hearing days should be sufficient to accommodate the presentation and cross-examination of all witnesses, including any witnesses presented by FERC Trial Staff.
Under the proposed schedule, an initial decision would be issued by approximately late November 2025 — roughly three and a half years after Ridgeline's original May 2022 filing. While Ridgeline would have preferred a more expeditious resolution, Ridgeline submits that this timeline is reasonable given the scope of the tariff redesign necessitated by the Deficiency Letter and the complexity of the remaining contested issues.
VI. Discovery Matters
Ridgeline proposes that the parties confer promptly following the prehearing conference to establish a discovery protocol governing the supplemental phase of this proceeding. In light of the comprehensive nature of the redesigned tariff and the volume of supporting workpapers and cost-of-service model data that will accompany the filing, Ridgeline believes that an organized and efficient discovery process is essential to maintaining the proposed procedural schedule.
In this regard, Ridgeline notes that a protective order governing commercially sensitive cost data was proposed in September 2022 correspondence between counsel for Ridgeline and counsel for ATPC (William Pratt, Kellner, Royce & Dillard LLP). While the parties discussed the terms of a protective order at that time, a formal protective order was never entered because the procedural schedule was stayed shortly thereafter. Ridgeline respectfully submits that a protective order should be negotiated and finalized before the exchange of updated workpapers supporting the redesigned tariff, particularly given that the cost-of-service model and rate design workpapers contain proprietary financial information, detailed cost data, and commercially sensitive assumptions regarding Ridgeline's operations and future business plans.
Ridgeline is prepared to produce all Braswell Energy Consulting Group workpapers, the updated cost-of-service model, and all supporting data underlying the revised recourse rate of $0.3140/Dth, subject to appropriate confidentiality protections under the terms of an agreed protective order. Ridgeline anticipates that the volume of discovery materials will be substantial and suggests that the parties establish a common electronic document repository for the efficient exchange of discovery materials.
Ridgeline further notes that FERC Trial Staff — including Jonathan Briggs, Lead Trial Attorney, Office of General Counsel, and Dr. Miriam Okafor, Lead Economic Analyst, Office of Energy Market Regulation — should be included in any discovery conference and should be a party to any agreed protective order, to the extent permitted by the Commission's rules.
VII. Settlement Discussions
Notwithstanding its proposal for the resumption of the hearing schedule, Ridgeline remains willing to continue settlement discussions in parallel with the hearing track. Settlement Judge Howard Margolis remains appointed in these proceedings, and Ridgeline understands that he remains available to convene additional settlement conferences.
Ridgeline respectfully suggests that the filing of the redesigned tariff on February 21, 2025 may narrow the issues between the parties and create new opportunities for settlement. In particular, Ridgeline's reduction of its proposed ROE from 14.00% to 12.50% and its adoption of a 75% load factor (down from 100%) — both of which move in the direction of the intervenors' positions — may provide a basis for constructive dialogue. Accordingly, Ridgeline respectfully proposes that a fifth settlement conference be scheduled within thirty (30) days following the filing of the redesigned tariff — that is, on or about March 21, 2025.
Ridgeline notes that the parties' positions on the three key sticking points — ROE, interconnection cost allocation, and load factor — may evolve in light of the updated filing parameters and the analysis presented in Ridgeline's supplemental testimony. The revised filing will provide the parties with a concrete and updated basis for evaluating the reasonableness of Ridgeline's proposed rate and may facilitate productive settlement negotiations.
Ridgeline emphasizes, however, that the parallel settlement track should not delay the hearing schedule. If the parties are able to reach a settlement, the parties would file a joint offer of settlement with the Commission pursuant to 18 C.F.R. § 385.602 and the Commission's established procedures. If settlement is not reached, the hearing would proceed on the schedule proposed herein.
VIII. Coordination with Interconnection Proceeding (Docket No. RP22-847-001)
Ridgeline's redesigned tariff filing will include the Interconnection Agreement between Ridgeline and ATPC, filed as a FERC rate schedule. This addresses Deficiency Item 9, which identified the failure to file the interconnection agreement as a rate schedule as a deficiency in the original filing.
The interconnection facilities at the Wetzel County Interconnect — with an estimated total cost of $22.3 million — remain a contested issue regarding cost allocation. As discussed in Section II.F above, ATPC insists on a 50/50 cost allocation split, while Ridgeline proposes a 34.1%/65.9% allocation based on cost-causation principles. The metering station design specifications and operational procedures for the interconnection also remain in dispute.
Ridgeline proposes that all interconnection issues — including the cost allocation between Ridgeline and ATPC, the metering station design and specifications, and the operational procedures governing flows at the Wetzel County Interconnect — be addressed on the same procedural schedule as the rate case, consistent with the Commission's September 22, 2022 order consolidating Docket Nos. RP22-847-000 and RP22-847-001. Ridgeline submits that a consolidated hearing on all rate case and interconnection issues will be more efficient and will avoid the potential for inconsistent outcomes that could result from separate proceedings.
IX. Identification of Parties and Counsel
For the convenience of the ALJ and the record, Ridgeline identifies the following parties and counsel of record as reflected on the Commission's official service list in these proceedings:
Ridgeline Midstream Services LLC (Applicant)
Counsel: Calderwood & Harkness LLP George Trujillo, Responsible Partner, Energy & Infrastructure Practice Group Brett Callahan, Lead Associate David Stanton, Working Associate Patricia Dunmore, Billing Partner 1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7400
Appalachian Trunk Pipeline Company, LLC (Protestant/Intervenor)
Counsel: Kellner, Royce & Dillard LLP William Pratt, Senior Partner One PPG Place, Suite 2800 Pittsburgh, PA 15222
Client Contact: Sandra K. Fenton, Vice President, Regulatory Affairs Appalachian Trunk Pipeline Company, LLC 2200 Penn Center West, Suite 300 Pittsburgh, PA 15276
Mountainside Gas Producers Coalition (Intervenor)
Counsel: Whitmore & Sable LLP Rebekah Montague, Partner 1200 New Hampshire Avenue NW, Suite 600 Washington, DC 20036
Client Contact: Calvin Dreyer, Executive Director Mountainside Gas Producers Coalition 1100 Main Street, Suite 210 Morgantown, WV 26505
Clearwater Municipal Gas Authority (Intervenor)
Counsel: Fordham Municipal Law Group PC Stephen Greer, Principal 312 Adams Avenue, Suite 100 Scranton, PA 18503
Client Contact: Dennis Ott, General Manager Clearwater Municipal Gas Authority 455 Market Street Clearwater, PA 15330
FERC Trial Staff
Jonathan Briggs, Lead Trial Attorney Office of General Counsel Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
Dr. Miriam Okafor, Lead Economic Analyst Office of Energy Market Regulation Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
X. Request for Prehearing Conference
In light of the foregoing, Ridgeline respectfully requests that Your Honor schedule a prehearing conference for on or about March 7, 2025 — approximately two weeks after the anticipated February 21, 2025 filing — to address the following matters:
(1) The proposed procedural schedule set forth in Section V above, including any modifications proposed by the parties or deemed appropriate by the ALJ;
(2) The scope of supplemental testimony, including whether any limitations on the scope of the supplemental phase are appropriate in light of the existing record;
(3) Establishment of discovery protocols for the supplemental phase, including the terms of a protective order governing the exchange of commercially sensitive cost data and workpapers;
(4) Whether additional settlement efforts should be undertaken before proceeding to hearing, and the scheduling of a fifth settlement conference before Settlement Judge Margolis; and
(5) Any other matters that the ALJ or the parties wish to address in connection with the resumption of the Track II hearing.
Ridgeline submits that a prehearing conference at this juncture will allow the ALJ to hear from all parties, address any scheduling concerns, and establish a clear path forward for the efficient disposition of this proceeding.
XI. Consultation with Parties
In accordance with customary practice, Calderwood & Harkness has consulted informally with counsel for all parties regarding the proposed procedural schedule. The positions of the parties, to the extent known, are as follows:
• ATPC (through William Pratt, Kellner, Royce & Dillard LLP): ATPC has indicated a preference for a longer answering testimony period of seventy-five to ninety (75–90) days, rather than the sixty (60) days proposed by Ridgeline. Mr. Pratt has represented that the comprehensive nature of the redesigned tariff and the need for ATPC's engineering and rate experts to review the revised interconnection agreement and cost-of-service model support a longer preparation period.
• MGPC (through Rebekah Montague, Whitmore & Sable LLP): MGPC has expressed general agreement with the proposed timeline, subject to the availability of adequate discovery during the answering testimony period. Ms. Montague has indicated that MGPC's rate expert, Dr. Eleanor Vasquez, will need prompt access to Ridgeline's updated workpapers and cost-of-service model data to prepare responsive testimony within the proposed sixty-day period.
• CMGA (through Stephen Greer, Fordham Municipal Law Group PC): CMGA has not yet responded to Ridgeline's informal consultation regarding the proposed schedule. Calderwood & Harkness will continue to engage with Mr. Greer's office and will report any response at the prehearing conference.
• FERC Trial Staff (Jonathan Briggs): FERC Trial Staff has indicated general willingness to proceed promptly after the filing and has not objected to the proposed sixty-day answering testimony period. Mr. Briggs has indicated that Trial Staff's participation will depend in part on the scope of the supplemental issues and the direction of the ALJ at the prehearing conference.
Ridgeline respectfully submits that the proposed sixty-day answering testimony period is adequate in light of the circumstances. While Ridgeline appreciates ATPC's concerns regarding the scope of the redesigned tariff, Ridgeline notes that the redesigned tariff builds upon the previously filed record and that the parties have been apprised of the general direction of the redesign through the three quarterly status reports filed in June, September, and December 2024. The parties have thus had substantial advance notice of the nature and scope of the revisions that will be contained in the supplemental filing. Moreover, Ridgeline's commitment to produce all supporting workpapers and cost-of-service model data simultaneously with the filing should facilitate the parties' review and preparation of responsive testimony.
To the extent ATPC or any other party believes that additional time is needed, Ridgeline respectfully suggests that the matter be addressed at the prehearing conference, where the ALJ can hear from all parties and make an informed determination regarding the appropriate length of the answering testimony period.
XII. Conclusion and Relief Requested
For the foregoing reasons, Ridgeline Midstream Services LLC respectfully requests that the Honorable Judge Whitfield:
1. Acknowledge Ridgeline's confirmed intention to file the redesigned FERC Gas Tariff, Original Volume No. 1, and supplemental direct testimony on or before February 21, 2025, in compliance with the deadline established by Your Honor's March 4, 2024 order;
2. Adopt the proposed procedural schedule set forth in Section V above, or such modifications thereto as the ALJ deems appropriate after consulting with the parties at the prehearing conference;
3. Schedule a prehearing conference for on or about March 7, 2025, approximately two weeks after the anticipated February 21, 2025 filing;
4. Direct the parties to confer regarding the negotiation of a protective order and discovery protocol in advance of the prehearing conference, so that an agreed protective order may be submitted for the ALJ's approval at or before the prehearing conference; and
5. Consider scheduling a fifth settlement conference before Settlement Judge Margolis on or about March 21, 2025, to explore whether the redesigned tariff and supplemental testimony narrow the issues between the parties and create opportunities for a negotiated resolution of some or all of the contested matters.
Ridgeline reserves all rights and arguments under the Natural Gas Act, 15 U.S.C. § 717 et seq., the Commission's regulations at 18 C.F.R. Parts 154, 157, 284, and 385, and any other applicable law.
Ridgeline appreciates the Court's attention to this matter and stands ready to address any questions or provide any additional information that the ALJ may require.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
George Trujillo Responsible Partner, Energy & Infrastructure Practice Group Calderwood & Harkness LLP 1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7400
Email: gtrujillo@calderwoodharkness.com
Counsel for Ridgeline Midstream Services LLC C&H Matter No. 1016-00005
Certificate of Service
I hereby certify that a true and correct copy of the foregoing letter to Administrative Law Judge Clara Whitfield regarding the Proposed Procedural Schedule for Resumption of Track II Hearing in FERC Docket Nos. RP22-847-000 and RP22-847-001 has been served on this 15th day of November, 2024, via electronic mail and first-class United States mail, postage prepaid, upon all parties on the Commission's official service list in the above-captioned proceedings, including the following:
William Pratt, Senior Partner Kellner, Royce & Dillard LLP One PPG Place, Suite 2800 Pittsburgh, PA 15222 Counsel for Appalachian Trunk Pipeline Company, LLC
Sandra K. Fenton Vice President, Regulatory Affairs Appalachian Trunk Pipeline Company, LLC 2200 Penn Center West, Suite 300 Pittsburgh, PA 15276
Rebekah Montague, Partner Whitmore & Sable LLP 1200 New Hampshire Avenue NW, Suite 600 Washington, DC 20036 Counsel for Mountainside Gas Producers Coalition
Calvin Dreyer, Executive Director Mountainside Gas Producers Coalition 1100 Main Street, Suite 210 Morgantown, WV 26505
Stephen Greer, Principal Fordham Municipal Law Group PC 312 Adams Avenue, Suite 100 Scranton, PA 18503 Counsel for Clearwater Municipal Gas Authority
Dennis Ott, General Manager Clearwater Municipal Gas Authority 455 Market Street Clearwater, PA 15330
Jonathan Briggs, Lead Trial Attorney Office of General Counsel Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
Dr. Miriam Okafor, Lead Economic Analyst Office of Energy Market Regulation Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
The Honorable Howard Margolis Settlement Judge Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
Dated: November 15, 2024
By: ________
Brett Callahan Lead Associate Calderwood & Harkness LLP 1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7412
Email: bcallahan@calderwoodharkness.com