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Transco Agrees to Pay $7.6M in Refunds, Civil Penalties for Violating Affiliate Rules

FERC last Wednesday accepted a settlement in which The Williams Cos. has agreed to pay $7.6 million in refunds and civil penalties to resolve a staff investigation into the unlawful sharing of natural gas storage information.

In the agreement, Williams' Transcontinental Gas Pipe Line admitted that it violated the Federal Energy Regulatory Commission's rule against providing information on a preferential basis to a marketing affiliate, the agency said. The interstate natural gas pipeline, which extends from Texas to New York City, agreed to refund $4 million to its storage customers, as well as pay a $3.6 million civil penalty [IN04-2].

FERC's Office of Market Oversight and Investigations (OMOI) found that, from August 2001 through June 2002, an employee at Transco impermissibly shared the pipeline's nonpublic storage inventory information with traders at affiliate Williams Energy Marketing & Trading Co., a predecessor of Williams Power Co.

FERC said the pipeline employee's actions violated the Commission's standards of conduct, which bar jurisdictional gas pipelines from sharing transportation-related information, including storage information, with affiliated marketing personnel unless that information is made available at the same time to all potential customers.

In addition to the penalties and refunds, the Williams' affiliates agreed to adhere closely to a three-year plan that provides a framework for the company to improve its compliance with the Commission's affiliate-abuse rules and increase its monitoring of trading activities of both natural gas and electric power, the agency said.

In August 2004, FERC approved three similar settlements with Dominion Transmission Inc., Northern Illinois Gas Co. and Columbia Gas Transmission Corp. that involved the illegal sharing of non-public storage inventory information (see NGI, Aug. 9, 2004). The Commission ordered the payment of $4.5 million in refunds and $3.6 million in civil penalties. With the latest settlement, a total of $15.7 million in refunds and penalties will be paid to resolve issues stemming from the same OMOI staff investigation, the agency said.

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