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Archive for Thursday, March 27, 2003

Federal court upholds natural gas tax refund

March 27, 2003

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A federal appeals court on Wednesday rejected a challenge to the Kansas Corporation Commission's 2001 order to use gas tax refunds to help low-income Kansans pay their heating bills.

A group of large natural gas users -- including the Lawrence Paper Co. -- filed suits in federal and state courts to overturn the order and said they were owed the money instead.

But the federal district court said it didn't have the jurisdiction to hear the case; Wednesday the appeals court agreed.

"Plaintiffs' attempts to tie the KCC's orders to a violation of a federal statute or ruling of a federal court or agency are completely without merit," Judge Paul Kelly wrote in the ruling for the three-judge panel of the Denver-based U.S. Court of Appeals for the 10th Circuit.

The money at issue was collected by Kansas Gas Co., Greeley Gas Co. and Utilicorp United between 1983 and 1988. Those companies illegally charged customers the cost of natural gas taxes paid to the state during that time.

In 1999, KCC approved a plan under which the gas companies would repay the tax -- more than $30 million -- to the customers. But that plan changed during the winter of 2000-2001.

"By the end of January (2001), however, it had become apparent that many residential natural gas customers would face significant hardships due to the combination of lower-than-normal winter temperatures and substantially higher natural gas prices," Kelly said.

KCC modified the plan and ordered that the money go instead to help low-income residential customers, which would help the first 9,000 low-income customers who applied.

The federal courts said they didn't have jurisdiction over the orders of a state agency. Similar Kansas court challenges to KCC's order also have failed. State judges said they also lack authority to overturn the state agency's orders.

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