CMS Energy settled charges from the Federal Trade CommissionFriday that its acquisition of Panhandle Eastern and TrunklinePipeline limited competition for natural gas in 54 counties inMichigan. The settlement allows CMS to close the deal basicallyunchanged, but it did delay the closing by many weeks, a CMSofficial said.
“It’s important to realize this wasn’t a formal charge,” saidCMS spokesman Kelly Farr. “A few members of the FTC staff hadconcerns that this acquisition would drive up prices, and thissettlement eased their concerns. The deal is still the same, andall parties involved won.”
The settlement requires CMS subsidiary Consumers Energy to”loan” natural gas from its own system to shippers on third-partypipelines if its interconnect capacity with those pipelines fallsbelow historic levels. It also requires CMS to post moreinformation on its electronic bulletin board so “the whole gasworld knows what we know,” said Farr. The Commission voted toaccept the terms of the settlement 3-0.
The basis of the FTC complaint was that CMS would have incentiveto restrict other pipeline’s access to the Consumers Energy systemto support price increases on Trunkline and Panhandle. ANRPipeline, Great Lakes Transmission, Michigan Consolidated Gas Co.,and the two pipeline’s CMS is attempting to purchase all delivergas to the 54-county area. Each one also has interconnections withthe Consumers system. The FTC was concerned that pipelinecompetition, which is keeping rates below the maximums establishedby FERC and the Michigan Public Service Commission (MPSC), could becompromised if CMS restricts access to the Consumers system andelevates the prices on the interconnecting interstate pipelines.
The charges held up FTC approval under the Hart Scott Rodino Actby several weeks. The company now expects to close the acquisitionby March 31.
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