Enterprise Products Partners L.P.

SEC Filings

ENTERPRISE PRODUCTS PARTNERS L P filed this Form 10-K on 02/28/2018
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In October 2013, Seaway and certain committed rate shippers filed briefs on exceptions objecting to this committed shipper rate aspect of the ALJ’s 2013 Initial Decision, and also challenging various aspects of the cost of service determinations in the 2013 Initial Decision.  In February 2014, the FERC issued an order reversing the 2013 Initial Decision with respect to the committed rate issue, reiterating its policy of honoring contracts executed between pipelines and committed shippers and remanding the remaining issues to the ALJ for further review.  In May 2014, the ALJ issued an initial decision on remand, which largely repeated its prior findings, including as to the committed shipper rates. In February 2016, the FERC again reversed the ALJ decision with respect to the committed rate issue and upheld Seaway’s committed rates.  The FERC’s February 2016 order also ruled for and against Seaway on various issues related to the uncommitted rates and required Seaway to submit, by March 17, 2016, a compliance filing calculating new uncommitted rates consistent with the FERC’s order.  Seaway submitted its compliance filing on March 17, 2016 and it was accepted by the FERC in August 2016.  In September 2016, certain parties filed protests alleging that Seaway had not reduced the uncommitted rates by reflecting the FERC’s published index for 2016 and therefore the rates were not just and reasonable. In September 2016, the FERC accepted Seaway’s filing, subject to the condition that Seaway refile its uncommitted rates to reflect the 2016 index adjustment and refund the difference between the rates charged and the rates reflecting the adjustment.  In addition, the FERC directed Seaway to file a refund report.  In September 2016, Seaway paid refunds and filed revised rates reflecting the 2016 index adjustment that became effective in October 2016.  In November 2016, Seaway filed its refund report.

In December 2014, Seaway submitted an application requesting market-based rate setting authority. Certain parties filed protests to the application.  In September 2015, the FERC issued an order setting the matter for hearing. In December 2016, an ALJ issued an initial decision in the market-based rate proceeding (“2016 Initial Decision”) finding that the FERC should grant Seaway’s application for market-based rates. Parties filed briefs in support of and in opposition to the 2016 Initial Decision, and the 2016 Initial Decision is subject to review by the FERC.  We are unable to predict the ultimate outcome on the rates Seaway charges its shippers.

In October 2016, the FERC issued an advance notice of proposed rulemaking seeking comment regarding potential modifications to its policies for evaluating oil pipeline indexed rate changes and to the reporting requirements. The FERC observed that some pipelines continue to obtain additional index rate increases despite reporting on Form No. 6 that their revenues exceed their costs. The FERC is proposing a new policy that would deny proposed index increases if a pipeline’s Form No. 6 reflects revenues exceeding total cost of service by 15% for both of the prior two years or the proposed index increases exceed by 5% the annual cost changes reported by the pipeline.  The FERC also is considering requiring pipelines to file additional information for crude and product pipelines, non-contiguous systems and major pipeline systems. Initial comments were filed in January 2017, and reply comments were filed in March 2017.  We are unable to predict the outcome of this proceeding.

In December 2016, the FERC issued a Notice of Inquiry (“NOI”), following the recent holding by the D. C. Circuit that the FERC failed to demonstrate that there is no double recovery of taxes for a partnership pipeline as a result of the inclusion of the income tax allowance in a pipeline’s cost of service.  Historically, claims of double recovery have arisen when the FERC has considered permitting master limited partnerships (“MLPs”) to recover an income tax allowance under the FERC’s current income tax allowance policy. Although the issue of income tax allowance arose in the context of an oil pipeline formed as an MLP, the NOI is not limited in its scope to MLPs. Initial and reply comments in response to the NOI were filed in March 2017 and April 2017, respectively.  We are unable to predict the outcome of this proceeding.

Changes in the FERC’s methodologies for approving rates could adversely affect Enterprise.  In addition, challenges to our regulated rates could be filed with the FERC and future decisions by the FERC regarding our regulated rates could adversely affect our cash flows.  We believe the transportation rates currently charged by our interstate liquids pipelines are in accordance with the ICA and applicable FERC regulations.  However, we cannot predict the rates we will be allowed to charge in the future for transportation services by such pipelines.