FERC judge urges El Paso and California PUC to settle

By the OGJ Online Staff

HOUSTON, Sept. 5 -- A Federal Energy Regulatory Commission administrative law judge urged El Paso Corp. and the California Public Utilities Commission to negotiate a settlement of charges units of the Houston company manipulated gas prices.

The complaint, filed by the PUC, alleged gas prices were manipulated in California because of improper conduct between El Paso Merchant Energy Co. and El Paso Natural Gas. The PUC and other California parties alleged "affiliate abuse" between the two El Paso units acted to push up prices improperly.

El Paso has denied the charges. An effort in the early part of the summer to negotiate a settlement resulted in stalemate and more arguments and briefs were filed in the case in August. The judge is expected to make an initial decision by Oct. 9.

"All parties will agree that this case is extremely complex and controversial and will be a very difficult one for the commission to decide regardless of the initial decision, and it is almost certain that there will be appeals," said Curtis Wagner, chief administrative law judge.

The judge said a settlement was preferable because it will be a long time before a final determination is reached in the case. He also said Californians will benefit much earlier from a settlement. "The people of California deserve a quick end to this litigation and a settlement will provide them with a fair solution now," he said.

Wagner suggested that it is preferable to reach a "substantial monetary settlement" now that all parties can live with rather than take a chance on what a judge, the commission, and the courts may find. However, Wagner added a decision will not be made until all briefs are reviewed, and his comments shouldn't be construed otherwise.