CMS Energy settled Federal Trade Commission charges on Fridaythat threaten to hold up its acquisition of Panhandle Eastern andTrunkline Pipeline from Duke Energy. The FTC charged the purchasewould limit pipeline competition in 54 counties in Michigan. Thesettlement allows CMS to close the deal basically unchanged, but itdid delay the closing by many weeks, a CMS official said.
“Its important to realize this wasn’t a formal charge,” said CMSspokesman Kelly Farr. “A few members of the FTC staff had concernsthat this acquisition would drive up prices, and this settlementeased their concerns. The deal is still the same, and all partiesinvolved 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 FTC voted to accept theterms of the settlement 3-0.
The basis of the FTC complaint was that CMS would have anincentive to restrict other pipeline’s access to the ConsumersEnergy system to support price increases on Trunkline andPanhandle. ANR Pipeline, Great Lakes Transmission, MichiganConsolidated Gas Co., and the two pipeline’s CMS is attempting topurchase all deliver gas to the 54-county area. Each one also hasinterconnections with the Consumers system. The FTC was concernedpipeline competition, which is keeping rates below the maximumsestablished by FERC and the Michigan Public Service Commission(MPSC), could be compromised if CMS restricts access to theConsumers system and elevates the prices on the interconnectinginterstate pipelines.
The charges held up FTC approval under the Hart Scott Rodino Actby several weeks. When the deal was announced last October, CMSsaid it had planned to have the deal closed in January. Now, afterit finally gained FTC clearance, the company expects to close theacquisition by the end of March.
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