FERC should not make the "findings" on disputed facts and issues in a case involving Total Gas & Power North America Inc. (TGPNA), as previously recommended by enforcement staff, and should instead dismiss most of staff's claims, pursuing any remaining allegations in federal district court, the company said in a motion filed with the agency Tuesday.
In September, Federal Energy Regulatory Commission enforcement staff rejected TGPNA's arguments against staff's allegations of natural gas market manipulation by the company and two of its trading managers, but in a highly unusual move, staff also requested that the Commission schedule a hearing on certain factual matters before an administrative law judge (ALJ) [IN12-17].
Enforcement staff requested "that the Commission set this matter for a hearing before a Commission administrative law judge. Such a hearing is necessary to resolve certain material issues of fact that enforcement staff and respondents dispute." Staff also recommended that the Commission reject Total's legal arguments and challenges to FERC's authority, and "decide several issues of material fact, including certain foundational facts, that respondents either have not disputed or failed to sufficiently dispute."
But in a 24-page motion, TGPNA said allegations of manipulation in 38 point-months by staff included "no details for 33 of them. And the detail that enforcement staff provides for the remaining five point-months cannot establish any alleged scheme."
TGPNA also alleges that staff improperly requested rulings that the company "had intent to manipulate based on facts that enforcement staff admits are disputed," and requested "numerous rulings on 'factual' or 'legal' issues that are unsupported by the record, disputed, or contrary to established law." And staff requested rulings "on issues that are properly pending before the United States Court of Appeals for the Fifth Circuit," according to TGPNA.
TGPNA asked for leave to submit their response "for the limited purpose of responding to and refuting enforcement staff's newly made requests for multiple rulings without a trial-type proceeding."
The case centers on an Office of Enforcement show cause order issued last year that included allegations of natural gas market manipulation against the company and two of its trading managers. The order recommended civil penalties of nearly $226 million.
FERC staff has alleged that the trades took place at four Southwest locations between June 2009 and June 2012 at the regional trading hubs of SoCal, Permian, Waha and San Juan and were made by Total West Desk traders Aaron Hall, Therese Tran and Matthew Wilson. FERC staff first issued a notice of the ongoing investigation in September 2015.
Last year, TGPNA asked a federal district court judge to reconsider a decision that the company may not defend itself against the FERC staff allegations in court -- a conclusion that would effectively return the case to the Commission [No. 4:16-cv-01250]. TGPNA contended that the federal courts are the only place where alleged violations of the federal NGA may be sorted out. Attorneys for Total's North American operations argued that FERC does not get the first chance to decide alleged gas market manipulation cases.
But on Sept. 14, Senior U.S. District Judge Nancy F. Atlas once again rejected those arguments and denied TGPNA's motion to alter or amend her original judgement in the case. TGPNA immediately indicated that it would appeal the decision to the United States Court of Appeals for the Fifth Circuit.