A leading gas marketer last week decried FERC’s reprimand ofNatural Gas Pipeline Company of America (NGPL) formarketing-affiliate improprieties as being far too light. The minoradmonishment, according to Natural Gas Clearinghouse (NGC), failedto provide adequate redress to the overall market, and producersand marketers victimized by the Midwest pipeline’s wrongdoing.
A key critic of Natural’s behavior, NGC assailed theCommission’s decision to suspend half of the $8.8 million civilpenalty on the condition the pipeline remains on its best behaviorover the next two years. It called on FERC to reinstate the maximumfine, and to “reach deep into the arsenal of tools” it has at itsdisposal to impose stern remedial actions against Natural. Thepenalty alone – particularly one that has been cut in half – won’tbe enough to discourage Natural, or other interstate pipelines,from engaging in illicit affiliate activities in the future, themarketer said.
In addition to a maximum civil penalty, NGC urged FERC to orderNatural and its marketing affiliate, MidCon Gas Services, to”disgorge” all profits made from marketing-affiliate violations;prohibit MidCon Gas from conducting business on Natural for atleast as long as the Commission found the violations to haveoccurred (442 days); demand full separation of MidCon Gas fromNatural; require MidCon Gas to “disgorge” any capacity obtainedthrough its improper activities; and to require Natural and MidConGas to reveal, subject to a protective order, the details of thegas sales agreement with Amoco Production. These measures would”send a strong signal” to the industry that affiliate abuse willnot be tolerated, the marketer said.
The Commission slapped Natural with the multi-million civilpenalty last month for displaying favoritism to MidCon Gas whenawarding transportation capacity, a move that gave its affiliate acompetitive edge over non-affiliate shippers.
NGC also urged FERC to allow third-party inspection, subject toa protective order, of the settlement gas sales agreement betweenNatural/MidCon Gas and Amoco Production, privately resolving theaffiliate-abuse allegations that were lodged by Amoco and whichultimately led to the reprimand by the Commission. NGC says any”above-market dollars transferred to Amoco under this contractreflect not only the damages to Amoco, but are indicative of thedamages to others in the market. Amoco alone should not becompensated, and surely should not share in perpetuated ill-gottengains.”
©Copyright 1998 Intelligence Press. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |