CMS Finally Gets FTC Approval
CMS Energy settled charges from the Federal Trade Commission
Friday that its acquisition of Panhandle Eastern and Trunkline
Pipeline limited competition for natural gas in 54 counties in
Michigan. The settlement allows CMS to close the deal basically
unchanged, but it did delay the closing by many weeks, a CMS
"It's important to realize this wasn't a formal charge," said
CMS spokesman Kelly Farr. "A few members of the FTC staff had
concerns that this acquisition would drive up prices, and this
settlement eased their concerns. The deal is still the same, and
all parties involved won."
The settlement requires CMS subsidiary Consumers Energy to
"loan" natural gas from its own system to shippers on third-party
pipelines if its interconnect capacity with those pipelines falls
below historic levels. It also requires CMS to post more
information on its electronic bulletin board so "the whole gas
world knows what we know," said Farr. The Commission voted to
accept the terms of the settlement 3-0.
The basis of the FTC complaint was that CMS would have incentive
to restrict other pipeline's access to the Consumers Energy system
to support price increases on Trunkline and Panhandle. ANR
Pipeline, Great Lakes Transmission, Michigan Consolidated Gas Co.,
and the two pipeline's CMS is attempting to purchase all deliver
gas to the 54-county area. Each one also has interconnections with
the Consumers system. The FTC was concerned that pipeline
competition, which is keeping rates below the maximums established
by FERC and the Michigan Public Service Commission (MPSC), could be
compromised if CMS restricts access to the Consumers system and
elevates the prices on the interconnecting interstate pipelines.
The charges held up FTC approval under the Hart Scott Rodino Act
by several weeks. The company now expects to close the acquisition
by March 31.
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