FERC last week ordered El Paso Merchant Energy and El PasoMerchant Energy-Gas L.P. to stop stonewalling and turn overprotected materials to parties involved in a complaint case thatalleges the affiliates received preferential treatment when theyacquired 1.2 Bcf/d of California-bound firm capacity on El PasoNatural Gas.

The Commission did not rule on the merits of the complaint thatwas brought by the California Public Utilities Commission (CPUC)last year, but the decision clears the way for intervenors toreceive sensitive documents that are critical to the resolution ofthe case. The CPUC and others have asked FERC to rule quickly onthe complaint, claiming that the $38 million contract is largely toblame for the steep rise in natural gas prices in California.

Specifically, the Commission last week denied the El PasoMerchant affiliates’ request for rehearing of a June 2000 orderthat granted the CPUC the right to make certain discovery requestsof El Paso pipeline and its affiliates, and rejected rehearing of aSeptember protective order. The latter directed the El PasoMerchant affiliates to make available to all intervening parties,who agreed to the terms of the protective order, all of thematerials that were being submitted to the CPUC and FERC in thecase.

So far, the El Paso Merchant affiliates have refused to releasethe information to these parties, claiming that the materials beingfiled with the CPUC and FERC are for “Government Eyes Only.” Italso argued that the protective order offered inadequate protectionof its commercially sensitive information.

The Commission disagreed. “All of the information that El PasoMerchant seeks to shield…relates directly to the issues,” theorder said [RP00-241]. Also, FERC finds that the protective orderprovides “sufficient protection for El Paso Merchant’s commerciallysensitive documents.”

Filed last April, the CPUC’s complaint seeks to abrogate thecapacity contract arrangement between El Paso and the El PasoMerchant affiliates. The agency alleges the affiliates were given”preferential treatment” by El Paso during the open season for thecapacity.

Susan Parker

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