BRIEF OF MOGAS PIPELINE LLC ON EXCEPTIONS TO THE INITIAL DECISION under CP06-407.

1. The ID made an arbitrary and capricious finding that Gateway acquired the TMP Facilities in two segments, a 1.2 mile segment and a 4.4 mile segment. 43 2. The ALJs reliance on an incomplete set of documents leads to findings based on supposition, not fact. ...................................................................................... 52 D. MoGas Meets All Four Components of the Benefits Exception Test Addressed by the D.C. Circuits Remand Order. ....................................................................... 54 1. The TMP Facilities were converted to a new use. ............................................ 56 2. MoGas demonstrated that the TMP Facilities provide specific dollar benefits. ....................................................................................... 56 a.MoGas provided substantial evidence that shipper benefits from capacity release offset the alleged acquisition premium in rates. ............................. 61 b.The ability to use flexible point rights allows shippers to reduce commodity costs through the access to different gas supplies is a substantial benefit. .... 63 3. MoGas demonstrated that it was almost $4 million cheaper to buy the TMP Facilities at UtiliCorps acquisition price than to build comparable facilities. . ........................................................................................................................ 65 a.There are no grounds to discredit Witness Skidmores analysis and the ID supports none. ..................................................................................................... 67 b.Witness Skidmores analysis used the correct scope. ................................... 69 c.The precedent supports a finding that there was a substantial difference between the TMP Facilities acquisition cost and the cost to construct comparable facilities. .......................................................................................... 70 4. The Gateway/UtiliCorp Stock Purchase Agreement was the Product of Arms-Length Bargaining. .................................................................................. 74 VII. CONCLUSION ................................................................................................... 78 ii TABLE OF AUTHORITIES FEDERAL CASES Chesapeake & Ohio Railway Co. v. ICC, 571 F.2d 1190 (D.C. Cir. 1977) ..................... 29 Chritton v. National Transportation Safety Board, 888 F.2d 854 (D.C. Cir. 1998)......... 52 Cuddy v. Carmen, 762 F.2d 119 (D.C. Cir. 1985) ............................................................ 41 Dillmon v. National Transportation Safety Board, 588 F.3d 1085 (D.C. Cir. 2009) ....... 52 El Rio Santa Cruz Neighborhood Health Center Inc.. v. U.S. Department of Health and Human Services, 396 F.3d 1265 (D.C. Cir. 2005) ........................................................ 47 Federal Communication Commission v. Pottsville Broadcasting Co., 309 U.S. 134 (1940) ...........................................................