REGULATORY MATTERS

12 Months Ended

Dec. 31, 2011

REGULATORY MATTERS

REGULATORY MATTERS

NOTE 16    REGULATORY MATTERS

On May 24, 2011, the FERC issued an order initiating an investigation pursuant to Section 5 of the NGA to determine whether Tuscarora's existing rates for jurisdictional services were unjust and unreasonable. The FERC initiated this proceeding following a complaint filed by the Public Utilities Commission of Nevada (PUCN) and Sierra Pacific Power Company d/b/a NV Energy (NV Energy). On December 23, 2011, Tuscarora filed a petition with the FERC requesting approval of a Stipulation and Agreement of Settlement (Tuscarora Settlement), resolving all issues, raised in the Section 5 proceeding. On February 6, 2012, the Administrative Law Judge assigned to the case certified the settlement proposal and made a recommendation that the FERC approve the settlement. The settlement includes three year contract extensions to the term of a number of contracts with Tuscarora's largest customer. If approved, the rates will be effective January 1, 2012, and a moratorium on the filing of future rate proceedings under NGA Sections 4 or 5 will extend until December 31, 2014. Pursuant to the settlement, Tuscarora will have no future obligation to file a Section 4 rate case. A decision from the FERC is pending.