FERC last Wednesday approved a stipulation and consent agreement that requires Nebraska-based Cornerstone Energy to pay a civil penalty of $325,000 for violations of the agency’s shipper-must-have-title (SMHT) requirement and to disgorge $121,825, plus interest, in unjust profits.

Cornerstone Energy is a marketing company that provides natural gas commodity and energy-related services to commercial and industrial end-users throughout the Midwest. The violations were discovered and self-reported when Cornerstone Energy was acquired by Constellation NewEnergy — Gas Division, a subsidiary of Constellation Energy Inc.

The SMHT violations occurred on five interstate pipelines and involved the transportation of approximately 12.2 Bcf of gas from October 2002 through May 2007, said the Federal Energy Regulatory Commission (FERC) order approving the consent agreement [IN09-5].

FERC’s capacity release program requires that all shippers must have title to the gas at the time the gas is tendered to the pipeline or storage transporter and while it is being transported or held in storage by the transporter.

The order calls for Cornerstone Energy to pay the civil penalty to the U.S. Treasury within 10 days of the order. Because FERC was unable to identify specifically harmed parties, the company was directed to distribute the disgorged funds to certain energy assistance programs that receive and distribute funds from the Department of Health and Human Services.

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