Opinion ID: 388136
Heading Depth: 2
Heading Rank: 3

Heading: Share Acquisition Factor

Text: 38 Once total supply was estimated, the FERC used American Gas Association (AGA) data to predict annual reserve additions. Next, Northern's probable share of these yearly future additions was estimated. To make this estimate, the FERC staff and South Dakota relied on a weighted average of Northern's past acquisition rates. The FERC used three years (1974-76) while South Dakota based its figure on Northern's performance over six years (1971-76). The FERC approved an acquisition rate of seven to eight percent. South Dakota predicted that Northern's share would be fourteen to fifteen percent. The historical data is as follows: 39 Year Hugoton-Anadarko Permian Basin ---- ---------------- ------------- 1971 29.62% 29.37% 1972 20.14% 13.72% 1973 21.78% 7.95% 1974 6.62% 9.86% 1975 8.13% 10.59% 1976 4.25% 6.69% 1977 8.14% 4.49% 40 The FERC found that the sharp drop commencing in 1973 and 1974 could be attributed to increased competition from intrastate suppliers who were not confined by federal price ceilings. 17 South Dakota argues the decrease is an ephemeral phenomenon and that the NGPA, effective in 1978, has restored Northern to its strong competitive position. See note 16 supra. The FERC agreed that the NGPA will eventually relieve Northern's disadvantage in price competition but that the increased competition experienced in the earlier 1970's will continue. The Commission pointed to evidence detailing Northern's increased number of competitors and the expansion of the intrastate suppliers' equipment as foundation for this conclusion. This result is supported by substantial evidence. 41 South Dakota also attacks the FERC's use of AGA area revisions in computing Northern's share of available gas reserves in RP 77-56. South Dakota claims that the FERC staff understated Northern's share factor by vintaging the AGA revisions over the past six years. These revisions amounted to an increase in yearly reserve additions which thereby caused a reduction in Northern's percentage share. Staff witness Feinstein stated that the AGA, for various reasons, is not able to report additions in the year they occur. The AGA then reports the data as it becomes available. Feinstein vintaged these revisions, that is, he assigned the delayed figures to the year in which they were discovered. Feinstein testified that he relied partly on statements by Robert Kalisch, manager of gas supply for the AGA, made in another FERC hearing. A copy of Kalisch's testimony was made available to counsel and South Dakota cross-examined Feinstein on this topic. We find that the FERC's decision to include these revisions is well within their discretion. 42 Finally, we note that South Dakota presented only a single witness to support its contentions regarding all three elements of the FERC's decision. The South Dakota witness, Robert G. Towers, is not a geologist or a petroleum engineer. Therefore, his testimony could reasonably have been given less weight by the FERC.