Marketers lost a battle against LDCs last month when theMichigan Public Service Commission (MPSC) sided with MichiganConsolidated Gas (MichCon) and Consumers Energy in a dispute overfees charged for tracking title to gas that changes hands on theLDCs’ systems. The MPSC found it had no jurisdiction to regulatetitle transfer tracking fees.

The commission said since gas can move without title transfersand without utilities tracking transfers, the transfers are notintegral to gas transportation. “Rather, they can be viewed asseparate and distinct from the transportation service, and thetitle transfer tracking service offered by the utilities can beviewed as incidental to and not essential for the transportation ofgas.” In its order – which contradicted a staff recommendation forregulated title transfer fees – the MPSC said the marketers’argument put them in a dubious position on several counts.

“If they argue that the title transfer service should beregulated because it relates to the sale and purchase of gas, theymay find themselves, as buyers and sellers in that market, subjectto regulation by the Commission. If they assert that the market isa wholesale market not subject to Commission regulation, theargument bets the question why the Commission can or shouldregulate an ancillary service in that unregulated market. If theyargue that the title transfer service should be regulated becauseit relates to the transportation of gas, which the Commission doeshave jurisdiction to regulate, the face the arguments that thetitle transfers, by definition, do not involve any transportationof gas and are not sufficiently related to the transportationfunction to confer jurisdiction on the Commission.”

Marketers involved in the case are Dynegy, LG&E NaturalMarketing, Coastal Gas Marketing, Westcoast Gas Services, andAquila Energy Marketing. The marketers have 30 days from the June26 order to appeal to Michigan Circuit Court.

Consumers Energy spokesman Charles MacInnis said his company’sargument all along was marketers didn’t have to use the titletransfer tracking service. “It’s optional.”

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