Sempra Energy Trading is seeking to quash a FERC subpoena that ordered the company to submit data relevant to a hearing that is examining potential price manipulation in the California natural gas market.

FERC Chief Administrative Law Judge Curtis Wagner Jr. issued the subpoena to Sempra Energy in response to a request from Southern California Edison. In addition to Sempra, the Rosemead, CA-based utility also requested subpoenas be issued to PG&E Gas Transmission-Northwest Corp., Transwestern Pipeline and Kern River Gas Transmission as part of the Commission probe into the possible manipulation of gas prices by El Paso Natural Gas and its merchant power affiliates at the California border.

Sempra Energy cited a number of reasons in its request for Wagner to quash the subpoena. “First and foremost, Edison has made no attempt to show the relevance or materiality of the data it seeks from [Sempra] to the limited issues being litigating in this proceeding,” it said. “Second, by its own admission, Edison is pursuing [Sempra] because it has been disappointed in the discovery obtained thus far” from El Paso pipeline and its marketing affiliates in the complaint case, which was brought by the California Public Utilities Commission (CPUC).

Third, the “extreme breadth and burden of Edison’s data request” reveals that it is engaging in an “inappropriate ‘fishing expedition’ of questionable purpose,” Sempra told Wagner. Lastly, the information being sought by SoCal Edison is “both proprietary and of extraordinary competitive sensitivity,” it said.

FERC set the price-manipulation issue for hearing before Wagner earlier this month and ordered him to provide an initial decision within 60 days (see Daily GPI, March 29). At issue is whether El Paso pipeline and affiliates El Paso Merchant Energy Gas L.P. and El Paso Merchant Energy Co. exercised market power to drive up natural gas prices at the California border.

At the same time FERC advised SoCal Edison, which intervened in the complaint case and authorized a study addressing the dominance of El Paso pipeline and affiliates in the California market, to weigh “other factors” — aside from those already attributed to El Paso — during the hearing that also may have been responsible for the sharp rise in gas prices in the West. SoCal Edison said it sought the data and documents from the three pipelines and Sempra Energy to include in a “revised comprehensive study” that will examine “other variables” in the gas market.

While the utility is heeding the Commission’s advice to explore “other factors,” it remains convinced that El Paso pipeline and its affiliates are to blame for the high gas prices in California. “These other factors may or may not contribute to the deplorable market conditions within California, but they do not mitigate El Paso and El Paso Merchant’s market power or their exercise of that power,” SoCal Edison said when it requested the subpoenas.

Given that the three pipelines and Sempra Energy were “non-participants” in the CPUC complaint against El Paso — out of which arose the charges of market-power abuse and price manipulation — the only way to elicit responses from them was through subpoenas, the utility noted. FERC’s “usual data request procedures do not require responses from non-participants.”

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