FERC denies El Paso’s request for settlement judge

By the OGJ Online Staff

HOUSTON, Sept. 18, 2001 – Federal Energy Regulatory Commission officials denied El Paso Corp.’s request for a settlement judge in an “affiliate abuse” case, involving the sale of natural gas in California.

El Paso had asked FERC’s chief judge to appoint a judge to preside over negotiations with the California Public Utilities Commission and also to delay his initial decision for 60 days, while negotiations were under way. But the staff of the commission, the PUC, and Southern California Gas Co. opposed the request.

When some of the parties aren’t interested, the settlement process is “usually unsuccessful,” said Curtis Wagner, chief administrative law judge.

The case stems from a complaint filed by California regulators last year claiming El Paso Natural Gas Co., an interstate pipeline serving California, and El Paso’s marketing and trading arm, El Paso Merchant Energy Co., drove up natural gas prices by engaging in improper conduct between the two subsidiaries.

The state argued consumers are entitled to refunds as a result of the alleged price manipulation. El Paso denied the allegations and testified the companies followed FERC rules governing affiliate behavior.

Wagner has frequently urged the parties to settle the case. An initial decision in the case is due from Wagner on or before Oct. 9.

Each party has threatened to appeal a nonfavorable decision to the federal courts. Without settlement, Wagner has said he expects a final resolution will be delayed for years. He continued to urge the parties to informally begin settlement discussions now.

“This will give them a little more than 3 weeks to talk before the initial decision is issued,” Wagner said in his order.

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