Exhibit TPC-144 in Trailblazer Pipeline Co's proceeding under RP03-162: Prepared Answering Testimony of Peter Williamson.

Jnofflclal FERC-Generated P D F o f 20040130-0292 Received by FERC OSEC 10/10/2003 in D o c k e t # : RP03-162-000 Exhibit No. TPC-144 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Trailblazer PIpeline Company ) Docket No. RP03-162--000 PREPARED ANSWERING TESTIMONY OF J. PETER WlLLIAMSON ON BEHALF OF TRAILBLAZER PIPEUNE COMPANY 1 Q. Please state your name and business address. 2 A. My name is J. Peter William.son, and my business addresses are 89 Main Street, 3 West Lebanon, New Hampshire 03784 and P.O. Box 5160, Hanover, New 4 Hampshire 03755. Q. Have you previously filed prepared direct testimony in this proceeding? 6 A. Yes, I have, on November 27, 2002, Exhibit No. TPC-77. 7 Q. What is the purpose of your answering testimony? 8 A. I have been asked to respond to the 9 10 + , May 22, 2OO3 prepared direct 11 testimony of Elizabeth H. Crowe, on behalf of Indicated Shippers, Exhibit No. 12 IND-1, and to her June 19, 2003 prepared cross-answering testlmornj, Exhibit 13 No. IND-6. I have also updated my direct testimony. ENERGY E U 'rORV COMM ', V ...... 1 H-.~i,,~~: ' . i o . . . ~ . . . ~ . ................... DetcAdmit:~d......~..~..L~..--O_.... ~......~0..,,~Jl,~.~,' i- /j,,,- Jnofflclal FERC-Generated P D F o f 20040130-0292 Received by FERC OSEC 10/10/2003 in D o c k e t # : RP03-162-000 C a p b l ~n~ctum 3 4 5 6 7 8 9 10 11 12 14 15 16 Q. What procedure does lhe Commission follow wtlh respect to the capital structure 17 to be used for raLemaking purposes? 18 A. The procedure begins with the subject pipeline. If the pipeline has rated debt 19 that is issued publicly, then its own capital structure is normally used, urdess that 2O capital structure I:loes not reasonably reflect its operating dsk. Trailblazer does 21 not qualify for the use of its own capital structure, as I explained in my d'nect 22 testimony, Exhibit No. TPC-77. Next, the parent's capital structure is considered. 23 KMEP is Trailblazer's w e n t . Therefore, the next question is whether KMEP's 24 capital structure is appropriate for the risk in Trailblazer. I believe that V 2 Jnofflclal FERC-Generated PDF of 20040130-0292 Received by FERC OSEC 10/10/2003 in D o c k e t # : R P 0 3 - 1 6 2 - 0 0 0 1 - .'1"railblazer'srisk is more comparable to lhe risks of the set of "pure" gas Z transmission companies I have used to arrive at the 56% equity, 44% debt ratio 3 (60% and 40% in my direct testimony, Exhibit No. TPC-77), than it is to the risk 4 of its parent KMEP, a diversified owner of both gas and oil ...