By Simon Lack
The Federal Energy Regulatory Commission ((FERC)) became MLP investors’ new BFF last week. Only four months ago, FERC’s revised policy on allowing imputed tax expense in setting tariffs caused a memorable intra-day 10% drop and contributed to dismal 1Q performance (see FERC Ruling Pushes Pipelines Out of MLPs). Ever since, MLP investors have regarded FERC warily, sensitive to additional market shocks. Cost-of-service pipeline contracts, historically common but rare nowadays and the source of much of this volatility, are unlikely to be employed in the future.
The clarification issued last week was