CHAPTER 206 SENATE CONCURRENT RESOLUTION No. 1616
      A Concurrent Resolution urging the Congress to enact legislation providing relief from
      the order of the Federal Energy Regulatory Commission requiring Kansas natural gas
      producers to pay penalties and interest on certain refunds to customers.

WHEREAS, Since 1974, the Federal Energy Regulatory Commission
(FERC) and its predecessor, the Federal Power Commission, had al-
lowed natural gas producers in Kansas to include the cost of state property
taxes in their rates; and

WHEREAS, In 1983 a petition challenging the inclusion of the costs
of property taxes in rates was filed with FERC and FERC affirmed its
prior rulings allowing recovery of those costs; and

WHEREAS, In 1993, after the D.C. Circuit Court ordered FERC to
review its rulings, FERC reversed itself and ordered the payment of re-
funds retroactive to the year 1988; and

WHEREAS, Kansas producers paid the refunds ordered, including
interest, but in 1996 the D.C. Circuit Court reversed the FERC decision
and required instead payment of refunds, including interest, back to 1983,
the time of filing of the initial petition in the case; and

WHEREAS, The retroactive reversal of a practice that had been legal
for 19 years places an unjust and punitive financial burden, possibly ex-
ceeding $500 million, on the Kansas natural gas industry; and

WHEREAS, The ordered refunds threaten serious financial harm not
only to the Kansas natural gas industry but to the state and local econo-
mies and governmental budgets that rely on the industry's economic base:
Now, therefore,

Be it resolved by the Senate of the State of Kansas, the House of Rep-
resentatives concurring therein: That the Kansas Legislature urges the
Congress to enact S. 1388 and H.R. 2903, providing relief from penalties
and interest that FERC has ordered Kansas natural gas producers to pay
on refunds for property tax costs included in natural gas rates, retroactive
to 1983; and

Be it further resolved: That the Secretary of State be directed to send
enrolled copies of this resolution to each member of the Kansas Con-
gressional Delegation, to the chairperson of the United States Senate
Committee on Energy and Natural Resources and to the chairperson of
the United States House of Representatives Committee on Commerce.

Adopted by the House March 10, 1998.

Adopted by the Senate February 24, 1998.

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