Following a conference with parties Monday, FERC Chief Administrative Law Judge (ALJ) Curtis Wagner Jr. ruled that the manipulation charges against Energy Transfer Partners LP (ETP) and affiliates and the allegations against Oasis Pipeline LP and affiliates are different and should be considered in two separate hearings.

The Federal Energy Regulatory Commission (FERC) last Thursday set for hearing the charges against ETP and several affiliates — Energy Transfer Co., ETC Marketing Ltd. and Houston Pipeline Co. — for manipulation of physical natural gas prices at the Houston Ship Channel (HSC) and Waha trading hub on various dates from December 2003 through December 2005 (see Daily GPI, May 16).

The Commission also set for hearing the issues of whether affiliates Oasis Pipeline LP, Oasis Pipeline Co. Texas LP and ETP Texas Pipeline Ltd. violated certain regulations under Section 311 of the Natural Gas Policy Act of 1978 (NGPA), including unduly discriminating against nonaffiliated shippers and unduly preferring affiliated shippers; charging rates in excess of the Commission-approved fair and equitable rates, and, if so, the amount of unjust profits due shippers; and failing to file an amended operating statement in violation of agency regulations [IN06-4].

But FERC left it up to Wagner to decide whether the charges should be considered in a single case or separate proceedings. “The chief judge agreed with the parties and ruled that two separate hearings would be more appropriate and best serve the interest of the parties and the public,” Wagner said in an order.

He designated ALJ Bobbie J. McCartney to preside at the hearing and conferences involving ETP, and picked ALJ Carmen A. Cintron to oversee the Oasis Pipeline proceedings.

As for ETP, a hearing is scheduled for April 6, 2009; reply briefs are due July 20, 2009; and an initial decision is expected by Oct. 5, 2009, according to the chief judge’s order [IN06-3]. The Oasis Pipeline hearing is scheduled for Dec. 1, 2008; reply briefs are due Feb.16, 2009; and an initial decision by Cintron is to be issued by April 27, 2009.

FERC ordered the hearings because it said there were material facts in dispute that could not be resolved on the basis of the written filings that it has received from its enforcement staff and ETP so far. The ALJs will make a recommendation to FERC in an initial decision, which the agency can accept or reject in full or in part. The Commission will make a final ruling on key issues, including:

For market manipulation, FERC last July called for ETP to pay $82 million in civil penalties — the maximum $79 million for the manipulations at the HSC, and $3 million for the manipulations at Waha and Permian trading hubs (see Daily GPI, July 27, 2007). The Commission also is proposing disgorgement of $69.9 million, plus interest, in unjust profits. This includes $67.6 million for manipulation in the HSC and $2.2 million for manipulation at Waha and Permian.

In February FERC enforcement proposed that the agency increase the civil penalty against ETP by $25 million to $107 million and raise the unjust profits that the company would be required to disgorge to $74.9 million in the event it is found guilty of manipulation of gas prices. The proposed penalty increase was based on FERC staff’s claim that it uncovered additional manipulation by ETP that it was not aware of last July (see Daily GPI, Feb. 19).

The Commission also is seeking to revoke ETP’s blanket certificate to sell natural gas for one year. This means that ETP would have to get Commission approval for all jurisdictional sales of natural gas.

For the Oasis Pipeline NGPA violations the Commission proposes that ETP pay $15.5 million in civil penalties for undue discrimination and undue preference, and $500,000 for failure to file an amended operating statement. The Commission also is proposing the company disgorge $267,122, plus interest, in unjust profits.

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