Federal Energy Regulatory Commission Approves Revised Depreciation Rates for Grand Prix Pipeline LLC

Strategic Insights -

The Federal Energy Regulatory Commission has issued a delegated order approving the revised depreciation rates for Grand Prix Pipeline LLC's natural gas liquids pipeline system property accounts. The revised rates, which become effective January 1, 2022, were requested by Grand Prix on July 13, 2022, and are accepted as filed by the Commission. The depreciation rates for various property accounts, including right of way, line pipe, and buildings, are specified in the order.

Key Takeaways:

  • Grand Prix Pipeline LLC, a common carrier pipeline operated by Targa Downstream LLC, delivers demethanized mix NGLs from the Permian Basin in West Texas and New Mexico to Mont Belvieu, Texas.
  • The pipeline's assets consist of two main pipeline segments: an approximately 462-mile segment extending from the Permian Basin to North Texas and an approximately 276-mile segment extending from North Texas to Mont Belvieu.
  • The Commission accepted the revised depreciation rates for all property accounts effective January 1, 2022, as requested by Grand Prix.
  • The depreciation rates for specific property accounts are as follows: right of way (4.00%), line pipe (4.00%), pipeline construction (4.00%), buildings (5.00%), pumping equipment (4.00%), and asset retirement costs for truck lines (4.00%).
  • The acceptance of revised depreciation rates by the Commission does not prejudice any findings or orders made or to be made in any proceeding pending or instituted against Grand Prix.
  • The order constitutes final agency action, and requests for rehearing may be filed within 30 days of the date the order issues.

Statistics:

  • The Grand Prix Pipeline LLC pipeline system spans approximately 738 miles (462 miles + 276 miles).
  • The pipeline delivers demethanized mix NGLs from two main source areas: the Permian Basin in West Texas and New Mexico.
  • The revised depreciation rates for Grand Prix Pipeline LLC's property accounts became effective January 1, 2022.
  • The Commission approved depreciation rates for 10 specific property accounts: right of way, line pipe, pipeline construction, buildings, pumping equipment, asset retirement costs for truck lines, delivery facilities, communication systems, office furniture and equipment, and vehicles and other work equipment.

Sources:

  • Grand Prix Pipeline LLC, Docket No. DO22-13-000: Delegated Order, September 27, 2022
  • Code of Federal Regulations, Title 18, Chapter I, Part 347, Oil Pipeline Depreciation Studies (Subchapter P, Title 18)