NGI The Weekly Gas Market Report
Scana Energy Marketing, a subsidiary of Scana Corp., has filed alawsuit in Cobb County Superior Court in Georgia in an attempt tohave the marketing alliance contract, which it signed in 1998 withsix co-ops, nullified.
The 10-year contract Scana engaged in with subsidiaries of CobbElectric Membership Corp., Snapping Shoals EMC, and four other co-ops,stipulated that Scana would sell natural gas to over 200,000 of theco-ops electricity customers while Cobb and Snapping Shoals wouldoperate the billing service and call center (see Daily GPI, June 11, 1998).
“Under current Georgia law, energy marketing corporations, asthe co-ops are known, are not allowed to provide any other servicesfor profit basis, or a not for profit basis other thanelectricity,” said Scana spokesman Roger Schrum. “Obviously, theyare providing us with billing services that we pay for, which ofcourse would be in conflict with that statutory requirement.” Ofthe six co-ops, Cobb Energy Management Corp. and Snapping Shoalsprovide the natural gas billing services for Scana.
Schrum pointed to similar cases in which an EMC attempted tosell propane services. The Georgia Supreme Court ruled that FlintEnergy, a unit of Flint EMC could not sell anything other thanelectric services. Schrum said the stance has been reaffirmedrecently as Walton EMC was turned down by the Georgia PublicService Commission when it attempted to become a certified naturalgas marketer. Both cases occurred after Scana had already signedthe contract he added.
Scana Energy Marketing is also seeking to recover $8.9 milliondollars in damages and out of pocket expenses. “They have not metthe performance aspects of our contract to provide billing and callcenter services,” he said.
A hearing was held for the case early last week in which thepresiding judge said she would decide before the end of the monthwhether the case should be decided through arbitration orlitigation. “It is our intent to proceed with litigation” saidSchrum.
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