California regulators and state utilities said they supported El Paso Natural Gas Co.’s request for oral arguments and “expeditious resolution” of the capacity-withholding and affiliate-abuse complaint case against the pipeline, but they took issue with El Paso’s claim that a FERC judge’s ruling last month in favor of California was “misleading and misguided.”

An expedited decision “is particularly warranted given the chief judge’s recommendation that a penalty or remedies phase of the proceeding be conducted. The faster appropriate penalties and remedies are established, the quicker the uncertainty concerning El Paso’s financial condition will dissipate and the sooner the complainants will obtain their long-awaited remedy,” said the California Public Utilities Commission (CPUC), City of Los Angeles, Southern California Edison and Pacific Gas & Electric Co., which brought the complaint against El Paso in April 2000 [RP00-241].

“Without trying to strip the heavy gloss off, or to correct, every statement made by El Paso,” the CPUC and others argued that the negative reaction by the financial markets to the initial decision of FERC Chief Judge Curtis Wagner was to be expected, and they dismissed El Paso’s claims that the ruling would have “broad implications” for the entire pipeline industry, and would affect the safety or reliability of interstate gas pipelines.

Furthermore, they asked FERC to schedule oral arguments in the case on Nov. 21, rather than on El Paso’s proposed date of Nov. 22. By scheduling it one day earlier, California representatives can avoid traveling during the Thanksgiving period, “the most heavily traveled week of the year.” Also, the California parties took issue with El Paso’s request for six hours of oral arguments, calling it “excessive.” Instead, they said three hours would be sufficient for both sides to present their arguments to the full Commission. Unlike El Paso, they requested that the Commission staff be permitted to make oral arguments.

In his long-awaited ruling in the high-profile complaint case, Wagner in late September found that El Paso withheld large amounts of capacity from customers during the California energy prices to drive up natural gas prices. Last October, in a separate initial decision, the judge said the pipeline also had abused the Commission’s market-affiliate rules.

The full Commission now has the option to reject or accept in full or in part Wagner’s initial decisions. FERC Chairman Pat Wood has indicated the agency hopes to rule on the complaint case before the end of the year.

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