From: w..cantrell@enron.com
To: k..allen@enron.com, don.black@enron.com, suzanne.calcagno@enron.com, mark.courtney@enron.com, jeff.dasovich@enron.com, frank.ermis@enron.com, donna.fulton@enron.com, l..gay@enron.com, mike.grigsby@enron.com, p..hewitt@enron.com, keith.holst@enron.com, paul.kaufman@enron.com, tori.kuykendall@enron.com, susan.mara@enron.com, ed.mcmichael@enron.com, stephanie.miller@enron.com, l..nicolay@enron.com, matt.smith@enron.com, patti.sullivan@enron.com, robert.superty@enron.com, m..tholt@enron.com, barry.tycholiz@enron.com, ray.alvarez@enron.com, alan.comnes@enron.com, robert.frank@enron.com, scott.gahn@enron.com, harry.kingerski@enron.com, leslie.lawner@enron.com, dave.perrino@enron.com, greg.sharp@enron.com, kristann.shireman@enron.com, d..steffes@enron.com, scott.stoness@enron.com, jennifer.thome@enron.com, steve.walton@enron.com
Date: 2001-11-02 16:17:37+00:00
Subject: NGI Article:  El Paso Seeks to Derail Further Market Power
 Investigation

Another wrinkle in the El Paso/CPUC Complaint case.  I've also attached a copy of the El Paso Merchant answer to the FERC enforcement staff motion in case you're interested.

NGI's Daily Gas Price Index 
published : November 2, 2001
El Paso Seeks to Derail Further Market Power Investigation 
The motion by the enforcement staff of the Federal Energy Regulatory Commission for a "more complete investigation" of unused capacity on the system of El Paso Natural Gas is "an abuse of process," the pipeline and its merchant energy affiliate claimed Thursday, since it comes after the case has been fully litigated. 
In filing a motion to strike the enforcement staff's request for the investigation, El Paso Natural Gas and El Paso Merchant Energy said the staff motion is a violation of their due process rights, since an initial decision in the case was issued three weeks ago (see Daily GPI, Oct. 10 <http://intelligencepress.com/subscribers/daily/news/d20011010c.html>). At that time Chief Administrative Law Judge Curtis Wagner Jr. recommended the dismissal of charges that El Paso and its affiliate exercised market power to drive up prices for gas transported to the border beginning in mid-2000 [RP00-241]. The judge had concluded that the complainants in the case failed to carry their burden of proof that the El Paso companies exercised market power by withholding capacity from the market. 
After the parties file briefs on the ALJ's decision, all that remains is a vote by the commissioners, the El Paso companies pointed out. 
The investigation sought by the Market Oversight and Enforcement Section (MOE) of the Office of General Counsel "seeks to improperly shift the burden of proof by requiring El Paso and Merchant Energy to prove that they did not withhold capacity. This argument turns the Commission's adjudicatory procedures -- and its procedural safeguards -- on their head," the companies said. 
"MOE is attempting to inappropriately influence the decision-making process in this already high profile case," putting the integrity of FERC's adjudicatory process in jeopardy. "The rules under which the complaint is to be judged have become a moving target, El Paso's and Merchant Energy's due process rights and reputation have been harmed, and they have been put in the untenable position of now trying to prove a negative. MOE's improper comments should be disregarded and stricken from the record in this proceeding," the companies said. 
MOE said the issue it was raising -- whether El Paso made its unused capacity available to shippers on an IT basis, as required by FERC's open-access rule -- was neither the focus of the hearing last summer nor Wagner's initial decision (see Daily GPI, Nov. 1) <http://intelligencepress.com/subscribers/daily/news/d20011101d.html>.. 
MOE said its review of the public portion of the hearing record suggests that El Paso may have committed "potential violations" of FERC's Part 284 open-access regulations by withholding IT capacity in an attempt to keep prices up at the California border, but it said there may be "other potential explanations" for the existence of unused capacity on the pipeline. "We recommend a more complete investigation of the reasons why capacity went unused on the pipeline at times during the period [of] November 2000 through March 2001." MOE conceded its motion was an "unusual" move. 
It suggested that the Commission either direct MOE to conduct a further probe, remand the decision to Judge Wagner for consideration or use other procedures. Although "this step is unusual, it is not unprecedented for the Commission's enforcement staff to inform the Commission of its views regarding potential violations concerning a pending proceeding," MOE said. 
El Paso pointed to a statement by the judge to back up its claim that parties in the proceeding had agreed that the pipeline was full from November through March. 

Here is a copy of the El Paso Merchant Energy response summarized above.  They used some pretty strong language!!

 

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From:  <rrich@bracepatt.com>
To: Cantrell, Rebecca W. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Bcantre>
Date: Thursday, November 1, 2001 10:33:33 GMT
Subject: 

EPNG/EPME's response