Opinion ID: 436086
Heading Depth: 2
Heading Rank: 1

Heading: Purchase Price of Williams' Assets

Text: 173 As discussed supra at 1497, FERC rejected the Williams Company's attempts to use the purchase price of its assets in its rate base and depreciation basis calculations. FERC soundly held that the use of purchase price instead of original cost in rate base calculations would engender an undue incentive to trade pipeline assets at a high price, which, under a purchase price regime, would increase allowable rates. 76 See 21 FERC at 61,635. Furthermore, in keeping with this court's remarks in Farmers Union I, FERC eliminated the use of purchase price as the basis upon which to calculate depreciation expenses. See id. at 61,635-36. 77 As Williams' procedural and substantive objections to these rulings all lack merit, we approve FERC's decision to eliminate purchase price generally from oil pipeline ratemaking. 78 174