FERC Wednesday approved a settlement agreement requiring Maine distributor Bangor Gas Co. LLC to pay a civil penalty of $1 million for violations of the agency's "shipper-must-have-title" requirements. This marked the first time that FERC has exercised its enhanced penalty authority under the Energy Policy Act of 2005 (EPAct) for natural gas violations.

The Bangor, ME-based local distribution company did not hold title to the gas it transported on behalf of nine customers from the interconnection of the Veazie and Bucksport Laterals with Maritimes and Northeast Pipeline's mainline delivery points to delivery points on its own distribution system in Maine. This was a violation of FERC regulations, which require all shippers to have title to the gas while it is being transported.

San Diego, CA-based Sempra Energy owned Bangor Gas at the time of the violations, which occurred between July 2000 and September 2006, the FERC order said [IN07-23]. Bangor's violations surfaced as a result of due diligence performed in connection with the sale of Bangor Gas. Sempra Energy submitted Bangor's written self-report on the violations to FERC's Office of Enforcement.

The stipulation and consent agreement requires Bangor Gas to pay the $1 million civil penalty to the U.S. Treasury within 10 days. It also requires Bangor Gas to file semiannual reports with the Office of Enforcement for a period of one year to assure compliance with the agency's transportation requirements, including the shipper-must-have-title requirements.

Bangor Gas did not profit from its violations and staff identified no financial harm to third parties caused by Bangor's violations, according to the order.

"This is the first imposition of civil penalties for natural gas violations under our new Energy Policy Act authority. When considered with the recent electricity settlements approved by the Commission...today's action shows that Commission enforcement covers the full range of our regulatory authority," said Chairman Joseph Kelliher.

Bangor Gas distributes natural gas to residential, commercial and industrial customers in 12 Bangor-area communities.

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