Just because your competitors are breaking the rules, doesn’tmean that you should be allowed to do so, FERC essentially told twoEnron affiliates last week when it denied their plea for a limitedwaiver of its capacity-release rule and the “shipper must havetitle” policy. The affiliates contend they sought the waiver sothey could compete with other suppliers that allegedly are ignoringthe title rule in order to evade paying certain taxes in New YorkState.

Enron Capital &amp Trade Resources and Enron Energy Servicesaccused competing marketers of carrying out in-transit transfers oftitles to gas destined for the New York State market in order toescape the state’s gross receipts tax – a practice, they say, thatpermits competitors to sell their gas more cheaply than Enron.

FERC acknowledged it had awarded “certain limited exceptions” tothe title rule in the past, but “those exceptions were for validbusiness or operating reasons,” the order said [RP98-220]. “Statetaxing policy is beyond the regulatory purview of the Commissionand [is] not a sufficient basis for an exception to theshipper-must-have-title policy.” Moreover, “the noncompliance ofothers…is not a valid basis for granting the waiver,” the ordernoted.

In the event the Commission turned them down, the Enronaffiliates asked that FERC issue a warning to other marketparticipants to cease the practice. “If Enron brings to theattention of the Commission an identification of those entities[it] believes are not in compliance, the Commission could then takeappropriate steps to ensure compliance,” it noted.

The Enron companies sought the waiver for their commercial andindustrial customers in New York that are receiving gas on CNG,Columbia Gas, National Fuel Gas, Tennessee and Transcontinental GasPipe Line.

Susan Parker

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