Responding to a request from El Paso Corp., California regulators and other parties, FERC last week agreed to push back its decision in the high-profile case alleging manipulation of natural gas prices in California by 45 days to give the parties time to submit a formal settlement offer and seek dismissal of the charges.

The Commission struck the controversial El Paso complaint case from last Wednesday’s meeting agenda. It also struck cases related to allocation of transportation capacity on the El Paso Natural Gas pipeline and the Power-Up expansion project, saying these could be affected by the terms of the El Paso-California settlement.

In a formal motion filed at the agency on March 21, El Paso, the California Public Utilities Commission (CPUC), Pacific Gas and Electric, Southern California Edison and the city of Los Angeles said the requested delay would provide them with “additional time to reduce their agreement in principle to a formal settlement agreement” and file it with FERC.

The parties sought the stay on the same day that Houston-based El Paso announced it had reached a “comprehensive settlement agreement in principle” that resolves all regulatory and legal actions related to the sale or delivery of gas and electricity to California and three other western states from September 1996 to the present. The total cost of the settlement, which included both cash and non-cash concessions, was estimated at $1.7 billion (See NGI, March 24). El Paso does not admit any wrongdoing in the agreement.

Specifically, El Paso and California parties asked FERC to refrain from ruling on two initial decisions of the agency’s Chief Judge Curtis Wagner Jr. — one that found El Paso Natural Gas had withheld substantial amounts of capacity from California to ratchet up gas prices in the state during 2000 and 2001, and an earlier one that concluded the El Paso pipeline had violated Commission regulations prohibiting pipes from giving preferential treatment to their marketing affiliates [RP00-241].

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