FERC Judge Delays El Paso Pipeline Ruling

August 27 2002 – An administrative law judge will delay a decision for several more weeks on whether El Paso Corp. improperly withheld pipeline capacity from the California natural gas market to inflate prices by billions of dollars, an aide said on Monday.

Curtis Wagner, the senior judge with the Federal Energy Regulatory Commission, earlier this month said he planned to issue an initial decision in the case by the end of August.

The new target date for the decision is “soon, hopefully within the next several weeks,” Wagner’s aide told Reuters.

California accused El Paso and its affiliates of intentionally holding back capacity on its four natural gas pipelines into the state during the height of the California power crisis from November 2000 through March 2001.

The California Public Utility Commission, PG&E Corp.’s Pacific Gas & Electric and Edison International’s Southern California Edison claim El Paso’s actions contributed to a sharp rise in prices and cost Californians an extra $3.3 billion.

El Paso has denied any wrongdoing.

Natural gas is widely used to fuel electricity generating plants in California. Record high prices for natural gas were blamed for contributing to the state’s electricity shortages.

After Wagner issues an opinion on the El Paso case, FERC commissioners will then take action to dole out penalties or clear the firm of wrongdoing.

Wagner is also brokering negotiations this week between eight power companies and California to renegotiate $43 billion in long-term contracts the state signed last year at the height of its electricity crisis.

FERC is writing new rules to create standards of conduct to ensure that a natural gas pipeline company shares market-sensitive information about available capacity in a fair way with all firms, not just its affiliates. The agency has proposed requiring pipelines to announce all discounts on the Internet and to limit the capacity that an affiliate can hold on a pipeline.

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