Chevron U.S.A. Inc. (CUSA) received notice Friday that is being audited by a division of FERC regarding natural gas wholesale market activities from Jan. 1, 2014 to the present.
The Federal Energy Regulatory Commission's Division of Audits and Accounting in the Office of Enforcement said the audit would evaluate CUSA's compliance with the code of conduct for holding blanket marketing certificates, firm capacity releases on interstate pipelines and FERC Form No. 552, the required annual report of natural gas transactions [PA16-1-000].
Documents and information obtained by Commission staff during the audit, and all workpapers developed, would be "nonpublic," according to the letter sent by Office of Enforcement Director Larry R. Parkinson. The letter was sent to Chevron Pipe Line Co.'s Tana Daughtrey, vice president, law.
Under its Natural Gas Act (NGA) authority, CUSA would be required to furnish "any information the Commission may request; grant Commission staff free access to its property, accounts, records and memoranda; and allow Commission staff to keep copies of any accounts, records and memoranda that pertain to the audit."
Commission staff also would be allowed to examine the books, accounts, records and memoranda "of any person who controls, directly or indirectly, CUSA, and of any other company controlled by such person, insofar as they relate to transactions with or for the business of CUSA."
FERC earlier in January voted to initiate a different type of audit, NGA Section 5 investigations, of the rates charged by four interstate gas pipelines to determine if they were "substantially over-recovering their costs, resulting in unjust and unreasonable rates" (see Daily GPI, Jan. 21). The Commission voted unanimously to investigate the rates of Tuscarora Gas Transmission Co., Empire Pipeline, Iroquois Gas Transmission System and Columbia Gulf Transmission. Each pipeline was directed to file a cost and revenue study within 75 days and set each case for evidentiary hearings before a FERC administrative law judge.
Since 2009, FERC has initiated at least 10 proceedings under Section 5 to determine if pipeline revenues significantly exceed their annual cost of service, according to James Sarikas of FERC's Office of Energy Market Regulation. Eight of the proceedings ended with settlement agreements and two were terminated.
Chevron has an extensive network of natural gas, crude oil and refined product pipelines and storage facilities in North America.
Subsidiary Chevron Pipe Line, headquartered in Bellaire, a Houston suburb, transports crude oil, refined petroleum products, liquefied petroleum gas, natural gas and chemicals within the United States. In the Gulf of Mexico, Chevron also has a 136-mile, 24-inch diameter crude oil pipeline from its Jack/St. Malo deepwater hub to a platform in Green Canyon Block 19 on the Outer Continental Shelf.