FERC Wednesday approved a stipulation and consent agreement that allows Calpine Corp. affiliate Calpine Energy Services LP (CES) to include a $4.5 million civil penalty claim in its bankruptcy proceeding to resolve self-reported violations of the agency’s shipper-must-have-title requirements. The U.S. Bankruptcy Court for the Southern District of New York approved payment of the claim to the agency.
The Federal Energy Regulatory Commission found that CES violated regulations when the company failed to hold title to 156.5 Bcf of natural gas that CES transported on eight natural gas pipelines. The company’s violations of the shipper-must-have-title requirement numbered in the thousands and varied in type, including the misuse of capacity held by Calpine affiliates to serve other affiliates, and improper movement of gas to storage and delivery of gas to other pipelines and markets, FERC said.
“Given the scope and nature of the violations, the penalty ordered by the Commission would have been substantially higher had the company not self-reported and demonstrated exemplary cooperation,” said FERC Chairman Joseph Kelliher.
Commission policy requires shippers on interstate natural gas pipelines to hold title to the gas they are transporting at the time gas is delivered to the pipeline and while it is being shipped on the pipeline. The policy is intended to promote pipeline open-access and prevent undue discrimination in both primary and secondary markets for natural gas transmission capacity, the agency said.
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