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Missouri Gas Probe Finds Capacity Rules Violated

FERC's Office of Enforcement has preliminarily determined that Kansas City, MO-based natural gas distributor Missouri Gas Energy (MGE) violated the agency's capacity release regulations. The alleged violations involved a total of almost 69 Bcf of capacity.

Enforcement staff's investigation of MGE, a division of Southern Union Co., is still ongoing, and no penalty has been assessed, a spokeswoman for the Commission told NGI.

According to a Federal Energy Regulatory Commission notice, which was issued Tuesday, MGE violated regulations when it: rolled over short-term discount rate capacity to the same replacement shipper without posting the capacity for bid; failed to fully disclose the terms and conditions of a prearranged released; failed to post for competitive bidding discounted rate long-term capacity releases; 4) used its capacity rights to park and store gas for which it did not have title in violation of the shipper-must-have-title requirement; and engaged in improper buy/sell arrangements by purchasing natural gas from a counterparty and reselling the gas back to the same counterparty.

MGE serves about a half million residential, commercial and industrial customers in western Missouri via its 8,000-mile gas distribution system. It has gas contracts with Kinder Morgan Interstate Gas Transmission LLC, Panhandle Eastern Pipe Line Co. LP, Southern Star Central Gas Pipeline Inc., Trunkline Gas Co. LLC and Quest Pipelines.

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