The Market Oversight and Enforcement Section of FERC’s Office ofGeneral Counsel has ordered Williams Gas Pipelines Central Inc. topay refunds and reduce its base tariff rates for customers servedby its Webb storage facility in Grant County, OK.

FERC took this action because of Williams’ failure to stem themigration of natural gas from the storage field over the pastcouple of decades. Gas reportedly has been migrating westwardoutside the certificated boundary of the field as far back as 1972.Williams has been aware of the activity since 1974, and knew that”offset” producers west of the field were producing the gas, buttook “inadequate steps” to stop the migration, according to anorder approving a stipulation and consent agreement between theFERC enforcement staff and Williams.

Within 30 days of the order, Williams has agreed to refund $1.4million to compensate customers in part for the costs they incurredas a result of the pipeline’s loss of Webb field gas that migratedwestward. In addition, Williams has agreed to reduce its storagerate base by $1.6 million when it files a “limited” Section 4 ratecase in six months, the consent agreement noted. The latterreflects the removal of about 16.4 Dth of gas from Williams’ ratebase that was lost from the field over a period of years.

As part of the agreement, Williams also said it would keep themaximum inventory of its Webb field at 46 Bcf, which is about 9 Bcfshort of its maximum certificated level. And it would operate wellslocated in the western half of the field as withdrawal orobservation wells only, not as injection wells.

Overall, Williams’ Webb storage field has lost an estimated 15Bcf of gas, the stipulation and consent agreement said. The currentlosses from the field are approximately 220,000 Mcf annually, itnoted.

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