Nicole Gas Production Ltd., a minority-owned natural gas producer with wells in western Pennsylvania and Ohio, has brought a formal complaint against Columbia Gas Transmission at FERC, claiming that the pipeline’s decision to discontinue transportation service to the company this month was based on racial discrimination.

In the complaint filed Sept. 11, Westerville, OH-based Nicole Gas Production claimed Columbia Gas Transmission “without proper notice cut off our gas supply to our customers and has voided our transportation gathering agreement,” causing economic harm to the company. “It is my belief that Nicole Gas Production Ltd. is being discriminated racially by Columbia Gas Transmission based upon the fact that Nicole is the only minority-owned gas producer…shipping gas over [Columbia’s system],” wrote Nicole President Freddie L. Fulson [RP02-541].

“That’s just plain ridiculous. Every one of his charges are false,” said Columbia Gas Transmission spokesman Kelly Merritt. The NiSource-owned pipeline cut off service to Nicole Gas Production “relatively recently” because the producer failed to pay $415,000 in imbalance charges, he noted. Since 1999, Merritt estimated Nicole Gas Production has over-nominated 113,000 Dth of gas for shipment on Columbia than it actually put into the pipeline’s system.

Columbia filed a petition earlier this month with the U.S. District Court for the Western District of Pennsylvania, seeking repayment of the outstanding funds from Fulson and his company. It also asked for injunctive relief to prevent the transfer of meters from production pools in western Pennsylvania.

Nicole Gas Production claims the allegations that it owes imbalance charges and over-nominated its production are false. “We don’t believe we owe them anything,” said Fulson, who likened his company’s ongoing dispute with Columbia Gas Transmission to that of “David vs. Goliath.” Furthermore, Nicole accused Columbia Gas Transmission of overcharging it for gathering on “several occasions.”

The producer contends Columbia Gas Transmission “has violated the FERC rule that allows the shipping of gas over the pipeline and…is denying Nicole’s right to ship gas to its customers.” This alleged action “is damaging our business economics well-being to earn a living and keep associates of Nicole employed,” the company told the Federal Energy Regulatory Commission.

Nicole Gas Production requested a “fast-track” ruling on its complaint.

In related action in April, affiliate Nicole Energy Services Inc., a gas marketer in Ohio, filed a similar complaint against Columbia Gas of Ohio with Ohio regulators, claiming the utility discriminated against it by incorrectly crediting the total volume of gas produced from wells in Pennsylvania and West Virginia (see NGI, April 8).

As a participant in Columbia Gas of Ohio’s retail choice program, Nicole Energy claimed that the utility’s mistake in crediting of gas made it appear the marketer did not have enough gas to serve its 20 customers, even though affiliate Nicole Gas Production Ltd. said it “placed sufficient quantities of gas” into Columbia Gas Transmission’s pipeline system. Because of the alleged crediting error, Nicole’s Fulson said customer gas was interrupted and Nicole Energy was terminated from the Columbia Gas utility’s choice program in January 2001.

Columbia Gas of Ohio sued Nicole Energy for more than $700,000 for its failure to make deliveries to customers, and Fulson said Nicole Energy countersued the utility and Columbia Gas Transmission for not crediting the gas correctly. The case is scheduled for trial on Dec. 3 in an Ohio state court.

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