Daily GPI / NGI All News Access

CMS Finally Gets FTC Approval

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 official said.

"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.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus